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Am I entitled to a refund of my PMI?
Posted on 6/27/13 at 10:53 am
Posted on 6/27/13 at 10:53 am
Backstory - I purchased a home last September and have now accepted a new job that requires me to relocate and put my recently purchased home up for sale. We have a conventional loan and our PMI was financed over the life of the loan rather than being front-loaded.
I'm going to end up taking a bloodbath selling the house regardless, but I'm trying to figure out how much of my $18K down payment that I can salvage when I sell.
Purchase price - $220K
Down Payment - $18K
PMI (financed over 360 payments) - $4343 total
Loan at origination - $206343
Current loan balance - $203100
Since I'm selling my house only 10 months after purchasing and essentially paying off the entire mortgage, am I entitled to a refund of any of the PMI?
I'm going to end up taking a bloodbath selling the house regardless, but I'm trying to figure out how much of my $18K down payment that I can salvage when I sell.
Purchase price - $220K
Down Payment - $18K
PMI (financed over 360 payments) - $4343 total
Loan at origination - $206343
Current loan balance - $203100
Since I'm selling my house only 10 months after purchasing and essentially paying off the entire mortgage, am I entitled to a refund of any of the PMI?
1
Posted on 6/27/13 at 11:22 am to Shenanigans
That PMI was probably for the first year while the year 2 premium would be escrowed. Therefore, you should get back the unused 2 months of year 1 and any escrowed amount for year 2. The same goes for you other insurance.
Posted on 6/27/13 at 11:32 am to MG
Thanks for the reply. My understanding during the loan and closing process was that the mortgage company I used (Franklin American Mortgage FWIW) was paying the PMI upfront and then financing all the PMI over my 360 payments, meaning my payment would never go down even once I got below 80% LTV.
I'm planning on speaking with my guy at Franklin American today about it, but want to make sure I have all ammunition ready when we discuss.
I'm planning on speaking with my guy at Franklin American today about it, but want to make sure I have all ammunition ready when we discuss.
Posted on 6/27/13 at 11:34 am to Shenanigans
keep us updated i am curious to see how this is done, in 12 years i have never had a customer request a PMI refund so i want to see how that is done.
Posted on 6/27/13 at 12:19 pm to hawkeye007
Why would someone want to pay PMI over a long time? I though once someone build 20% equity, one could do away with it.
Posted on 6/27/13 at 12:23 pm to fishfighter
It lowered my monthly payment by over $150 dollars. I never thought I'd live in the house long enough to get above 20% equity, just didn't see myself having to sell this soon.
Posted on 6/27/13 at 3:49 pm to Shenanigans
quote:
Thanks for the reply. My understanding during the loan and closing process was that the mortgage company I used (Franklin American Mortgage FWIW) was paying the PMI upfront and then financing all the PMI over my 360 payments, meaning my payment would never go down even once I got below 80% LTV.
Keep in mind that your Year 1 PMI that you put into the loan probably equals to something like $14 a month over 30 years. However, you probably contribute about $360 a month to the escrow account for year 2, then year 3, then year 4, so on and so on. Once you reach 80% LTV you shouldnt have to pay the $360/mo ($4,300+), but you will still have to pay the $14/mo because you financed that. PMI or first year of Homeowners or first year of Flood, it doesnt matter. If you finance that first year up front, that first year will be spread over the life of the loan.
Posted on 6/28/13 at 11:18 am to fishfighter
My understanding is sometime this year, all new FHA loans that require PMI will have to have PMI through the life of the loan.
Somebody who knows better to me might speak to this. I heard this from a couple of realtors.
Somebody who knows better to me might speak to this. I heard this from a couple of realtors.
Posted on 6/28/13 at 1:20 pm to CourseyCorridor
quote:
My understanding is sometime this year, all new FHA loans that require PMI will have to have PMI through the life of the loan.
This is correct. June 1st was the official date when this went into effect.
Posted on 6/28/13 at 3:10 pm to AUtigerNOLA
quote:
quote:
My understanding is sometime this year, all new FHA loans that require PMI will have to have PMI through the life of the loan.
This is correct. June 1st was the official date when this went into effect.
Can you eventually refinance to get rid of PMI? I bought my house in December with a FHA loan. I imagine I won't live there long enough to matter, but just curious.
Posted on 6/29/13 at 5:38 am to LSUTigKyl
Sounds like a scam if a home owner has to pay thru the life of the loan. Big brother screwing the American dream again. 
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