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PMI payments question
Posted on 4/1/14 at 8:22 pm
Posted on 4/1/14 at 8:22 pm
Is this for the life of a mortgage? Does it ever drop of? Does refinancing remove it?
6
Posted on 4/1/14 at 8:33 pm to HailToTheChiz
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.
Posted on 4/1/14 at 8:36 pm to HailToTheChiz
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^
Or what he said^
This post was edited on 4/1/14 at 8:37 pm
Posted on 4/1/14 at 8:43 pm to soccerfüt
Thanks all
Posted on 4/1/14 at 8:45 pm to HailToTheChiz
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.
Posted on 4/1/14 at 11:26 pm to HailToTheChiz
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.
Posted on 4/2/14 at 8:28 am to HailToTheChiz
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
Posted on 4/2/14 at 8:33 am to mglsu21
Fha
Posted on 4/2/14 at 8:38 am to HailToTheChiz
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 4/2/14 at 8:39 am
Posted on 4/2/14 at 8:43 am to Taxing Tiger
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.
Posted on 4/2/14 at 8:43 am to HailToTheChiz
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
Posted on 4/2/14 at 9:51 am to Feed Me Popeyes
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%.
Posted on 4/2/14 at 11:46 am to AUtigerNOLA
If I only plan to stay in house 7 years or so, should I even bother trying to refinance
Posted on 4/2/14 at 12:28 pm to HailToTheChiz
quote: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.
If I only plan to stay in house 7 years or so, should I even bother trying to refinance
Posted on 4/2/14 at 2:16 pm to HailToTheChiz
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.
Posted on 4/2/14 at 10:42 pm to HailToTheChiz
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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