Info on paying PMI up front

Author Message
Icon Mini Profile dcrum0





Joined: 18 Feb 2008

Posts: 19

10.23 Dollars($)
Post Posted: Thu Feb 21, 2008 7:16 am    Post subject: Info on paying PMI up front
Like
Dislike

I've read articles about buying out PMI or paying PMI up front but haven't talked to a lender that actually offers this program. A few months ago I was interested in doing a refinance on our mortgages and taking some cash out, we originally did an 80/15/5 loan. The 80% was on 30 year fixed and the 15% was on a 15 year fixed, which helped to avoid PMI. I was interested in doing one loan and paying PMI with a 20 year or 25 year fixed loan.

Guess what I'm asking is exactly how does the PMI buyout work? Is the amount based on a percentage of the loan? I assume it also matters what the Loan To Value amount is as well? Does a shorter term lower PMI or does it make it a higher risk loan and actually raise PMI. What lenders offer this type of program?

Thanks for your answers.

_________________
Icon Mini Profile jenkin7
jenkin7




Joined: 04 Jun 2007

Posts: 4537
Location: Hawaii
728.42 Dollars($)
Post Posted: Fri Feb 22, 2008 5:23 am    Post subject:
Like
Dislike

Hello Dcrum,

PMI buyout helps you to eliminate PMI either by paying an upfront PMI buyout fee or getting a slightly higher interest rate. The increase in the rate depends upon the amount you put as down payment or equity but it mostly increases by .2% to .35%.
Icon Mini Profile larry





Joined: 27 Jun 2007

Posts: 3322

474.68 Dollars($)
Post Posted: Tue Feb 26, 2008 5:31 pm    Post subject:
Like
Dislike

Hi Dcrum,

If you go for the PMI buyout then you may have to pay a bit higher interest rates. Are you planning to stay in the home long enough? Then I think it is better to go with PMI as you may be able to remove the PMI after couple of years.

Do you have 20% equity? If so then you can refinance without paying PMI.

Feel free to ask if you have any further questions.

Best of luck,
Larry
Icon Mini Profile dcrum0





Joined: 18 Feb 2008

Posts: 19

10.23 Dollars($)
Post Posted: Tue Feb 26, 2008 8:02 pm    Post subject:
Like
Dislike

I plan to stay in the house at least 5 more years. The house is appraised at $235k and we owe about $202k so we have about 14% equity. Would need $14k down to get 20%, plus closing costs. Can't do it right now and I think PMI just increased with all the housing problems.

Since I would need about $20k to pay toward the loan to avoid PMI, I think I might come out better paying the $20k down on the smaller home loan and focus on paying it off?

_________________
Icon Mini Profile jerry
jerry
Moderator



Joined: 17 Oct 2005

Posts: 3249
Location: MICHIGAN
510.68 Dollars($)
Post Posted: Tue Feb 26, 2008 10:28 pm    Post subject: RE: pay off PMI and second loan
Like
Dislike

Hi dcrum,

What I can say here is, yours is a good decision to build up 20% equity fast so that you can eliminate PMI. And, then focus on paying off the 2 loans. But don't stop paying for one just to continue paying off the other. Better make both payments in time.

Let me know your thoughts on this.

Thanks,

Jerry
Granny

Guest







Post Posted: Thu Sep 18, 2008 6:18 am    Post subject: Upfront PMI - how much
Like
Dislike

Our son, first time home buyer - FHA loan with less than 20% down - actually closer to 2.5%
How is the amount of the PMI upfront figured? He was asked to pay 4672.50 on a 316,000.00 loan.
Icon Mini Profile sara
sara
Moderator



Joined: 05 Jul 2006

Posts: 3236
Location: New Brunswick, New Jersey
581.38 Dollars($)
Post Posted: Fri Sep 19, 2008 4:55 am    Post subject:
Like
Dislike

Hi granny,

A similar query has been replied at http://www.mortgagefit.com/homeloan/upfront-pmi.html#60851 . Please have a look at it.

Take care
Kenneth Lombardi

Guest







Post Posted: Tue Feb 22, 2011 10:23 am    Post subject: PMI
Like
Dislike

I am using the no PMI option exclusely now. It doesnt make sense to pay it when home prices are not going up in the forseable future.


It is not a higher reat with our company either, we portfolio the loan.

[Phone Number Deleted as per the forum Rules. Thanks]

_________________
Need help choosing the right loan? Get free consultation from community lenders/consultant
All times are GMT - 7 Hours
Page 1 of 1

 

Page loaded in 0.471 seconds.