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LSUTigers00884
LSU Fan
Lafayette
Member since Oct 2011
966 posts

PMI Question
If you put 3% down on a home, I understand you’ll pay PMI.

But do you stop paying PMI once you reach 20% equity?

Thanks.


rowbear1922
LSU Fan
Baton Rouge
Member since Oct 2008
10644 posts

re: PMI Question
Yes

/thread


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DCtiger1
LSU Fan
Pensacola Beach
Member since Jul 2009
3757 posts

re: PMI Question
Only if it’s a conventional loan
This post was edited on 4/9 at 4:21 pm


HYDRebs
Ole Miss Fan
Houston
Member since Sep 2014
1014 posts

re: PMI Question
Yes and no. Must have a two year satisfactory payment history of the pmi before it can be canceled.

Also, it doesn't automatically drop off until 78%. You will typically have to do a couple steps with your mortgage company when you get to or think you hit 20% equity. Those steps are usually fairly simple though.


VABuckeye
Ohio State Fan
Oak Hill, VA
Member since Dec 2007
23471 posts
 Online 

re: PMI Question
FHA Rules

quote:

You can remove PMI after 11 years if you put more than 10% down. The FHA no longer allows borrowers to cancel FHA MIP after the LTV has reached 78%. You can still avoid paying mortgage insurance after you have paid down your loan-to-value to 80% or less, such as refinancing your FHA loan to a conventional loan.


Brian Wilson
Houston Astros Fan
Member since Mar 2012
1743 posts

re: PMI Question
Good bit of info.

Essentially, if it's a conventional loan, yes. You must carry it for a minimum of 2 years. Once you reach an LTV of 80% you can request that your lender remove it. Each lender has a different set of requirements but it basically comes down to the loan holder having to pay for an appraisal on the home to verify the value.

Your lender is required by law to remove PMI once you hit 22% equity/78% LTV.
This post was edited on 4/9 at 4:33 pm


tissle
Georgia Fan
Member since Jul 2009
1545 posts

re: PMI Question
Took a Conventional loan and put 5% down.
Paid PMI for 2 years. Got my house reappraised. Value went up by significantly. No more PMI for me.


Twenty 49
LSU Fan
Shreveport
Member since Jun 2014
11005 posts

re: PMI Question
That is what I did many years ago. The appraisal paid for itself in a few months.


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USA
Member since 2001
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good_2_geaux
LSU Fan
Member since Feb 2015
169 posts

re: PMI Question
quote:

Only if it’s a conventional loan


what about VA loans with 0 down?


good_2_geaux
LSU Fan
Member since Feb 2015
169 posts

re: PMI Question
This post was edited on 4/11 at 8:28 am


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HYDRebs
Ole Miss Fan
Houston
Member since Sep 2014
1014 posts

re: PMI Question
0 mortgage insurance whatsoever on a VA loan. They do have what is called a VA funding fee though. It is an unpfront fee that can vary in percentage based on your downpayment and whether or not you have a VA disability.


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sodcutterjones
LSU Fan
Member since May 2018
452 posts

re: PMI Question
And you have to inquire with your mortgage holder, right? They’re not going to cancel it automatically? Just a question I have as I’m on the verge of getting close to that 80% marker.


notsince98
Missouri Fan
KC, MO
Member since Oct 2012
9812 posts

re: PMI Question
quote:

But do you stop paying PMI once you reach 20% equity?


No. Many loans will require 22%.


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HYDRebs
Ole Miss Fan
Houston
Member since Sep 2014
1014 posts

re: PMI Question
quote:

And you have to inquire with your mortgage holder, right? They’re not going to cancel it automatically? Just a question I have as I’m on the verge of getting close to that 80% marker.



Correct each mortgage servicer is a little in their list of things that needs to get done to drop off at 20%. Automatic at 78% though as long as it has been 24 months.

If you are that close to hitting the 80% mark look to see if you can get it dropped off now with an appraisal. Most companies will allow this if you pay for an appraiser and it appraises for 80% LTV or less. (Note: only do this if the appraisal costs less than the Mortgage Insurance X amount of months left for you to pay.)


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thejudge
USA Fan
Westlake, LA
Member since Sep 2009
8202 posts

re: PMI Question
quote:

lso, it doesn't automatically drop off until 78%. You will typically have to do a couple steps with your mortgage company when you get to or think you hit 20% equity. Those steps are usually fairly simple though.


Typically you have to contact them and ask that it be removed. They may ask you for a statement in writing your wish to have the account reviewed. If you meet their criteria they will drop it.


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IntenseKid
Clemson Fan
Baton Rouge
Member since Oct 2014
1347 posts

re: PMI Question
We built a house in BR late 2017 and I want to say we didn’t put anything down. I was told the only way to get rid of PMI is to sell or refinance and you should only refinance if you get a better rate than you currently have.
This post was edited on 4/14 at 3:00 am


Neauxla_Tiger
LSU Fan
Member since Feb 2015
940 posts

re: PMI Question
quote:

We built a house in BR late 2017 and I want to say we didn’t put anything down. I was told the only way to get rid of PMI is to sell or refinance and you should only refinance if you get a better rate than you currently have.


That sounds like you have FHA/VA/RD. The government backed loans let you put down less down payment but you're stuck with the monthly PMI for the life of the loan. Conventional loans can get rid of it as the posters above have described


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