Money board I need your help on a topic I am not familiar with. I recently refinanced an investment condo through BOA to a 15 yr fixed rate. I had to get a PMI provision with the new loan since it did not meet loan to value. I reached the necessary loan to value mark of 20% last month and called BOA to cancel the PMI but was told I could not cancel because I have not had the loan for two years. Normally, I would not be mad but the loan officer that refinanced this loan (and other BOA personnel i spoke to) specifically said the only requirement to taking the PMI off was reaching the loan to value mark. I feel like BOA is pulling one over me and is just looking for yet another way to make money on me...can they be right in this case? Also, is this a normal stipulation for most refinances?? Thanks
Most of the Bank I have reviewed have a LTV % based on the collateral for PMI release AND a minimum number of periods (example two years) assigned to the loan type for PMI release.
I would review the fine details of your note and corresponding disclosures. Most likely, the officer just didn't know or remember this. Happens more than you would think in the mega-large national banks.
Mid Sized Regional banks (Iberia, Hancock/Whitney, etc) are ususally the best combination in customer service from the loan officer level and actual loan product terms IMO.
Do you have anything else in writing from the officer?
Most loan officers don't know the requirements. Plus they will pretty much say anything so you will close the loan. Once its closed they don't deal with it any more and it all falls on their customer service area. The bank should be able to send you a letter with the requirements. I doubt they are pulling a fast one and are going by what the note states. Again, loan officers will say anything to get you to close a loan.
when a PMI company issuses PMI they always do it for a min period. it is normally 2 years. Doubt the BOA loan officer new that because as a whole your Mega Bank Loan officers are horrible. thats what happens when the big boys dont have to get their LO's licensed.
It has been a while since I have had to deal with PMI, but if memory serves, the only way to get out of it would be to re-fi. It's not just meeting the loan-to-value threshhold... you have to then re-fi.
It depends on the loan. If it is a conventional mortgage, then by law it falls off when you hit the 78% equity value. You will have to request an appraisal prior to that and it is the lender's appraiser that you pay for and hope it hits 20% equity or higher or you just wasted $400. Also, most loans calculate the PMI period when you should hit 78%, there is some confusion about this, you can drop it sooner, but you must initiate it. Also, the requirement is usually two years or 20% equity, so you can't request it before the two year period. FHA you pay a premium upfront and have PMI whether you meet the 20% threshold or not.