PMI payments question | TigerDroppings.com

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HailToTheChiz
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PMI payments question



Is this for the life of a mortgage? Does it ever drop of? Does refinancing remove it?






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Taxing Tiger
LSU Fan
Prairieville
Member since Mar 2013
42 posts

re: PMI payments question


Not forever. They will continue until your LTV (loan to value) ratio reaches 78%. However, your required to at least make 60 monthly payments. Depending on your down payment and any extra principal payments you make, they could be gone in 5 years. If you only put 3% down and only make your standard monthly payment then they could stretch out to 10-11 years. Some lenders will allow you to finance/prepay the MIP upfront at closing. It's generally 1.75% of the loan amount if you choose to go this route.





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soccerfüt
Oral Roberts Fan
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Member since May 2013
2443 posts

re: PMI payments question


Private Mortgage Insurance (PMI) is an insurance policy taken out to cover a loan which is close to the value of a property. It usually dropped once the amount owed reaches 80% of the appraised value of the property. Different lending institutions have differing regulations. A second mortgage which gets back over the 80% LTV threshold will probably have it added to it.

Or what he said^



This post was edited on 4/1 at 8:37 pm


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HailToTheChiz
Auburn Fan
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Member since Aug 2010
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re: PMI payments question


Thanks all





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Brettesaurus Rex
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re: PMI payments question


If you can afford to, ask about paying a lump sum up front to avoid it completely, I did that and it's saving me over 200$ a month for the life of the loan.





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JonTheTigerFan
LSU Fan
Central, LA
Member since Nov 2003
4729 posts

re: PMI payments question


If it's an FHA loan, it's for the life of the loan. Even if you start out with FHA, you could refinance out of it later.





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mglsu21
LSU Fan
Prairieville
Member since Jun 2012
580 posts

re: PMI payments question


quote:

Is this for the life of a mortgage? Does it ever drop of? Does refinancing remove it?


Need more information on what type of loan






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HailToTheChiz
Auburn Fan
Behold, SKYWHALE!
Member since Aug 2010
7948 posts

re: PMI payments question


Fha





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mglsu21
LSU Fan
Prairieville
Member since Jun 2012
580 posts

re: PMI payments question


quote:

Fha


What JonTheTiger said. FHA is now for the life of the loan, but you can always refi later (when under 78% LTV) to get rid of it, if it makes sense at that time.



This post was edited on 4/2 at 8:39 am


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lsujro
LSU Fan
BR
Member since Jul 2007
2237 posts

re: PMI payments question


quote:

Not forever. They will continue until your LTV (loan to value) ratio reaches 78%. However, your required to at least make 60 monthly payments. Depending on your down payment and any extra principal payments you make, they could be gone in 5 years. If you only put 3% down and only make your standard monthly payment then they could stretch out to 10-11 years. Some lenders will allow you to finance/prepay the MIP upfront at closing. It's generally 1.75% of the loan amount if you choose to go this route.


this is applicable to fha loans. not necessarily the case for a conventional mortgage.






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Feed Me Popeyes
LSU Fan
Baltimore, MD
Member since Apr 2008
2064 posts

re: PMI payments question


PMI on FHA loans is currently brutal. Assuming yours is fairly high (as a % of your payment to principal + interest), this may be one of the few scenarios where it is a good move to pay off loan principal early in order to refinance more quickly. In most other scenarios, you're better off investing those extra funds





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AUtigerNOLA
Auburn Fan
New Orleans, LA
Member since Apr 2011
10155 posts

re: PMI payments question


I agree. I got my FHA loan well before the new rule of the life of the loan. It used to be 5 years or ltv 78%.





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HailToTheChiz
Auburn Fan
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Member since Aug 2010
7948 posts

re: PMI payments question


If I only plan to stay in house 7 years or so, should I even bother trying to refinance





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lsujro
LSU Fan
BR
Member since Jul 2007
2237 posts

re: PMI payments question


quote:

If I only plan to stay in house 7 years or so, should I even bother trying to refinance
i imagine this will depend on costs to refinance. i have the older type FHA as well. the rate is so low, i don't think it would benefit me to refinance to current rates. my current thinking is if values in my neighborhood continue to go up, i will refi. into a 15yr conventional (assuming rates don't skyrocket in the next few years). that is pretty wishful thinking tho. i will probably pay mortgage insurance until i move out of this house.






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NbamaTiger90
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Member since Sep 2012
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re: PMI payments question


quote:

f I only plan to stay in house 7 years or so, should I even bother trying to refinance


I am not sure that has any bearing on deciding to refinance or not. If you can save money then you should refinance. My new loan has no PMI and just that alone saved me 177.00 per mo.

We plan on selling our house in 5 - 10 years.






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Feed Me Popeyes
LSU Fan
Baltimore, MD
Member since Apr 2008
2064 posts

re: PMI payments question


quote:

If I only plan to stay in house 7 years or so, should I even bother trying to refinance



Depends. How much is your loan, interest rate, and PMI?






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