I have a couple of questions on PMI/MIP and how to drop it from an FHA loan.

Anyone?

Chris you need to prove to the mortgage company that you are now in the 20% equity area. Meaning that when you bought a $100,000 home and put 10% down, with your $90,000 mortgage, you also pay MIP or Mortgage Insurance premiums on the other 10% you dont have down payment. After a few years, your home went up in value, lets say to $105,000 and you paid down on your mortgage balance to... lets say $85,000. Now you are in the 20% equity position. Call FHA or your actual bank that you make payments too and ask them if you can drop the MIP now. Each state might be different. Also conventional loans might be different than FHA as well. Thats how it works, and if your loan is eligible to have MIP removed, then YES do it. You may need to provide a certified appraisal to 'prove' its current value to them, but for $300 appraisal, you eliminate the MIP totally, a good buy. :)

-Funk
My Daily Driven '67 RS - Yes, I drive it daily and will continue to do so. - Updated 3/22/07

My 72’ Gremlin X will stomp the snot out of any Pacer, Phoenix, Chevette or Bobcat.

Now a Pinto is a WHOLE nother story. Last time I saw one it was tail lights only baby!



Chris:
You also seem to have forgotten about mt Pro-Touring Turbo Colt!! TAIL LIGHTS are that Pinto's see buddy!!

Best to contact the mortgage company and ask how much for the appraisal from them. I know from previous experience some mortgage companies only will remove PMI if their own appraiser shows its value is above the 20% in equity mark. Use www.zillow.com to estimate your house's appraised value

Im figuring that the mortgage company which is the real money in this, (not FHA, they just insure a potential loss) doesnt have its own appraisers in every market. Who ever did the first original appraisel could be contacted and asked to 'update' or 'refresh' his original paperwork. Most MTG companies use smaller local banks or brokers as 'originators' and the closing company then handles the closing. The appraisel is in the closing papers normally. Get the name of that guy and call him up. Otherwise the MTG company will just ask the local originator for a name from their in-house list of appraisers.
Most appraisers are independent and do work for many,many MTG companies.
I would bug the original appraiser for a reduced price on an 'update' that meets the criteria that your MTG company requires to drop the MIP.
More people need to do this, saves a ton of $$

The wife is in the mortgage business. Send me an e-mail and I will have her reply.

P.S. She also does out of state loans also.

Dave

Good Luck. You will need it. They (the Mort co's) try and keep you in the PMI as long as possible.

If you push hard enough they will eventually relent, but you will probably have to threaten them..........

Rich

Thanks for the replies guys.

I called National City Mortgage today and they told me 5 years and 22% equity. We refied with them back in '03. I knew about the 22% and the house has that much based on what the selling price is on the same exact houses in our development and how much we owe on the note.

I did some research this afternoon and it seems that getting rid of this PMI/MIP can be a real PITA. What I can't find is a clear set of rules for my loan.

Joe, the turbo Colt doesn't count as it is not NA. :)

-Funk

Mortgage Insurance... what's that ?

Funk,

That doesn't seem right. Like I stated above, shoot me an e-mail and I will have the wife explain it. We will be in So. Cal this weekend but I will have access to a computer.

Dave

Mortgage insurance is for loans that are secured by less than 20% usually, downpayment. The MIP will kick in and pay to the MTG company if the case of a default on the MTG by the homeowner. If homeowner only has 10% down payment, and defaults, the MIP pays the MTG company the other 10% that is insured. Theory is that a default will still allow the MTG company to sell the now empty home and at least get their original MTG $ out of the sale. If a $100,000 home has $90,000 mtg on it and the seller defaults, the MTG company forecloses and takes the house. Now the MTG company has to sell that home and tries to get back their original $90K. BUT maybe the owner trashed the house or the market dropped in that area and the home is only worth $85K, the MIP then pays off on their policy up to their limits in the policy. In this case, MIP would cough up $5,000 to make the $85k and $5k total the $90k.
Chris, there should be some papers in your closing package from the MIP company, read thru it and see if their info. doesnt tell you what options you have.

Interest rates are good right now. If the rate is less than where you are at, do a refinance and with adequate equity you won't have any PMI.

Funk, keep after them. I did a # of years ago and they finally got tired of me and gave in.

You could use your city's assessment card for some proof of value.

You can look, but my guess you won't find any set guidelines on removal of the PMI. They don't want to be bound by set rules. They want the ability to make the decision on releasing the insurance or not. There are two types of borrowers good and bad. The lender doesn't want to have set guidelines saying they have to treat the good and the bad the same. Good borrowers don't want guidelines telling the lender that everyone has to be treated the same either.

I am a licensed broker in 8 states. Currently fha requires that you must keep that mortgage with pmi for 14 years even if there is more than 20% equity in the home. Get a new appraisal on the home and refi the home with a different lender.

I'm a direct lender in Jersey, licensed all over the country. call me at 732-566-4455.

John
www.mjslending.com (http://www.mjslending.com)

jpgrywalski@gmail.com is my personal email.

Proto is correct.

Thanks for your help John.

At this point I don't think we are gonna look at a refi. We have a fixed rate of 5% with 12 years to go and the MIP is only $28 a month.

Also In 2007, Pmi Is Tax Deductable!!!

I am a Sr. Mortgage Loan Officer and have closed loans in 10 different states. I have been in the mortgage business since 1999. Prior to that from 1989-1998 I was in the auto service industry as an assistant service manager, service writer & sales associate. Since 1999, I have worked for large banks, not mom & pop lending shops.

On a Federal Housing Association loan (FHA) it's a government backed loan. The Mortgage Insurance Premium (MIP) is a little different than Private Mortgage Insurance (PMI). With MIP on an FHA loan, you finance that into the loan up front. It's also for the life of the loan because it's an FHA loan. With Conventional PMI you make a monthly payment every month. If you are current on your payments on a regular PMI loan, you can call the lender and ask them remove the PMI once your Loan To Value (LTV) gets to be 80%. Per the PMI law signed by Bill Clintion, if you are current on your payments, even if you do not notify the lender, the lender must drop PMI at 78% LTV. This does not apply to FHA loans, only conforming conventional loans and maybe some jumbo loans. Remember the key is to be current on your payments. If you are late, the lender can elect to keep the PMI on there.

If your MIP is $28 per month, I would just let it go. Even if you were to refinance into a conventional loan, the rates are higher now than when you got your 5% rate (probably 2003). At 6.00 - 6.25% you will be paying more on your monthly payment due to an increased rate than you would be with the extra $28.

As far as PMI being tax deductible for 2007, that is correct, but if and only if the loan was closed in 2007. This would not apply to you since you closed prior to 2007. Furthermore from what I understand if the total household income is more than $110k annually PMI can not be deducted.

Bottom Line: Keep the 5% rate & the $28 MIP. You'll be lucky to get within 1% of that rate based on today's mortgage rates. As far as brokers, they are fine too. Just watch their fees. Some like to quote Super Low rates & no closing costs. The next thing you know you are socked with a 4% loan origination fee which equates to 4% of your loan amount. On a loan of $250k that is = to 10 grand!! :mad:

Good Luck!! :thumbsup:

South Side Goons & Hitmen!!

Gotta love a Goon! :D

Thanks for the info and tips.

We have a fixed rate of 5% with 12 years to go and the MIP is only $28 a month.The twelve years will go by fast and then you can have a mortgage burning party! Getting a 15
year 5% fixed rate loan was a great move. :thumbsup:

Many people here in California have recently purchased overpriced houses they could not afford, with loans they did not understand. Stated income (liar) loans, interest only loans, and adjustable rate loans with low introductory “teaser” rates have turned them into hopeless home debtors. Those rates are now resetting and a lot of them can’t make their new monthly payment. As a result quite a few mortgage lenders are going broke. The Mortgage Lender Implode-O-Meter (http://ml-implode.com/)

Interesting web site Steve.

"Foreclosure sales now 15 percent of all home sales in California."

WOW!

very interesting thread... i'm looking into getting into a home in the North Hampton area of PA come September/October 2007. Prices are so high in NJ it's a little better to move to eastern PA. I'm looking at Wachovia's My Community Loans, and downing ~5%.
So PMI will be my friend for a long time to come, I guess the key is trying to make extra payments to build the equity on top of all the interest you pay in the first half of the loan.