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Message
re: Getting rid of mortgage insurance- Updated with answer
Posted on 3/21/18 at 7:28 am to StringedInstruments
Posted on 3/21/18 at 7:28 am to StringedInstruments
quote:
Yeah and this is why I asked my questions earlier (which were subsequently downvoted for whatever reason). I was worried that with the little amount you've paid off that it was a post-2013 FHA loan. Sucks but those rules changed.
Something else that sucks is that there's indication that rates will not be going down any time soon. Some fears that they'll go up.
Nothing like a good kick in the nuts to start the day. So I'm essentially stuck with it for years to come it sounds like? $140 per month flushed away
3
Posted on 3/21/18 at 8:15 am to tiger10lsu
Yea that’s the big downside of the FHA loan vs. conventional. You got a better interest rate with FHA and were only required to put down 3.5%, but the PMI is for the life of the loan.
If you can qualify for a conventional loan and put down 5%, it is almost always the better option. Not only will it go away at 22% equity, but PMI is much cheaper on conventional loans as well.
If you can qualify for a conventional loan and put down 5%, it is almost always the better option. Not only will it go away at 22% equity, but PMI is much cheaper on conventional loans as well.
Posted on 3/21/18 at 8:21 am to tiger10lsu
Something the tax gurus here could speak to is the tax deductions you get for PMI payments vs tax deductions for interest paid.
You might pay a higher interest rate with a refinanced loan and not save in the month to month, but maybe you’d save more come tax season?
You might pay a higher interest rate with a refinanced loan and not save in the month to month, but maybe you’d save more come tax season?
Posted on 3/21/18 at 11:16 am to tiger10lsu
quote:
So I called and talked with my mortgage company yesterday. My loan is an FHA loan. Any loan after June of 2013 says you can not get rid of PMI with an FHA loan. The only way is to refinance. My current interest rate is 3.375%. If I were to refinance and get a new rate of 4.5-5%. I would actually pay more. They said wait for the interest rates to go back down. Then refinance. 6 months-a year
Stopping by to say this is unfortunately true no matter how bad it sucks. FHA loans now have life-of-loan PMI.
Posted on 3/21/18 at 11:22 am to tiger10lsu
quote:
Nothing like a good kick in the nuts to start the day. So I'm essentially stuck with it for years to come it sounds like? $140 per month flushed away
Sorry for being blunt, but you should have known this going in or your loan officer didn't explain it well.
As said, FHA loan is MIP and conventional loans are PMi. Mortgage insurance premium, you generally get to use a smaller downpayment and get a lower interest rate but the insurance is for the life of the loan.
Posted on 3/21/18 at 11:26 am to baldona
Well thanks for every ones input. I don't see interest rates going below my 3.375% for quite some time. Looks like I'll be paying that $140 per month until I can get to the next house.
Posted on 3/21/18 at 11:34 am to tiger10lsu
quote:
Well thanks for every ones input. I don't see interest rates going below my 3.375% for quite some time. Looks like I'll be paying that $140 per month until I can get to the next house.
If this isn't your forever home, then it isn't really that big of a deal. The next go round, hopefully you will be in a position to do a 15 year conventional loan and you'll catch up pretty quickly.
Posted on 3/21/18 at 12:34 pm to tiger10lsu
You are not unique OP, but I would recommend not looking at your interest rate but rather your APR or annual percentage rate. Apr is the actual cost of the loan to you, your interest rate, MIP, plus anything else.
While your interest rate could be great and yours' is, if you have a bunch of other expenses like MIP it may not be.
But yeah, overall are historically doing very well still so unless you are planning on being there for 10 plus years I wouldn't sweat it.
While your interest rate could be great and yours' is, if you have a bunch of other expenses like MIP it may not be.
But yeah, overall are historically doing very well still so unless you are planning on being there for 10 plus years I wouldn't sweat it.
Posted on 3/21/18 at 12:46 pm to baldona
quote:
But yeah, overall are historically doing very well still so unless you are planning on being there for 10 plus years I wouldn't sweat it.
Posted on 3/22/18 at 10:34 pm to tiger10lsu
quote:
Any loan after June of 2013 says you can not get rid of PMI with an FHA loan.
Man this sucks. I can relate. Not a fan of PMI at all.
Posted on 3/24/18 at 8:49 pm to TDFreak
PMI is such a screwing. You can pay X a year to State Farm to insure against the total loss of your home. It burns down, they pay replacement.
PMI only has to cover the difference if you default and the sale of your mortgaged property doesn’t cover the loan balance. Their premium is likely X or greater per year. They seem to charge way too much to insure against such a small potential claim.
PMI only has to cover the difference if you default and the sale of your mortgaged property doesn’t cover the loan balance. Their premium is likely X or greater per year. They seem to charge way too much to insure against such a small potential claim.
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