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Home Loan - Refi vs PMI Question
Posted on 3/10/15 at 1:49 pm
Posted on 3/10/15 at 1:49 pm
In 2012 i bought a house. Total cost was $206k, put 11% down. My loan type is a Farm Loan @ 3.5%. I have paid an additional $7 a month since the start just to make it a round number 
I pay $61/month in PMI.
Is it possible for me to eliminate the PMI by refinancing?
The area i live in is growing quickly which should increase my property value. I have also added items to the home (gutters, shutters, fence, longer driveway) which hopefully will bring up the value of the home. Am i on the right track with my thinking to eliminate the PMI?
I pay $61/month in PMI. Is it possible for me to eliminate the PMI by refinancing?
The area i live in is growing quickly which should increase my property value. I have also added items to the home (gutters, shutters, fence, longer driveway) which hopefully will bring up the value of the home. Am i on the right track with my thinking to eliminate the PMI?
This post was edited on 3/10/15 at 1:51 pm
4
Posted on 3/10/15 at 2:06 pm to SeaPickle
Yes, as long as your home appraises at an amount that gives you 20% equity, you can refinance and eliminate PMI with a conventional loan.
Posted on 3/10/15 at 3:03 pm to SeaPickle
You should not have to refinance to eliminate PMI, if you have 20% equity in the home. As I understand, it's really up to the lender. If you believe that you have 20% equity or more, but the lender will not remove PMI, then your next best bet is to shop around for refinancing and see if anyone else will not require PMI.
Posted on 3/10/15 at 4:03 pm to SeaPickle
Relatively new FHA homes don't allow you to get rid of PMI unless you refinance... are farm loans (Do you mean Rural Development loans) allow you to get rid of PMI or is it life of loan?
Posted on 3/10/15 at 4:29 pm to SeaPickle
Depending on when it was is 2012, you've probably knocked off about $10k in principal. So assuming you meant the purchase price was $206k, and you put 11% of that down you're looking at the following:
Current balance of roughly $173k, and LTV ratio of about 84%. This assumes the house still appraises for the same value as before.
Lots of factors to consider. How long you plan on staying there, how much cash do you have on hand to refinance and possibly come up with the difference to be at 78%, etc. Rates are on the upswing about .375% the last month or so also.
Current balance of roughly $173k, and LTV ratio of about 84%. This assumes the house still appraises for the same value as before.
Lots of factors to consider. How long you plan on staying there, how much cash do you have on hand to refinance and possibly come up with the difference to be at 78%, etc. Rates are on the upswing about .375% the last month or so also.
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