 DORMANTROOT
Joined: 26 Nov 2008
Posts: 2
2.54 Dollars($)
|
 Posted: Wed Nov 26, 2008 6:58 am Post subject: MY MORTGAGE |
|
|
Folks,
I locked in a rate on monday (11/24) and my tentative closing date is 12/19/08. Here are the details:
"http://www.flickr.com/photos/8922855@N07/3061378060/sizes/o/"
Here are some of the questions that's going through my mind:
1) How much principal should I pay off to cancel the PMI? My aim is to finish paying off the principal as soon as possible to get rid of the PMI.
2) Will biweekly payment be a good option to pay off the principal so that I can avoid PMI?
3) Is it true that there is a tax credit in 2009 for the PMI paid? If so, will it be available next year?
4)Can someone direct to a good article that would enlighten me about the Escrow account? Refering to my 'Good Faith Estimate'; the loan officer said that $1861.50 listed under 'Estimated Prepaid Items/Reserves' will go into the Escrow account.
Any advise would greatly help and I would be very grateful for that.
sincerely,
John
[/img]
[Link deactivated as per forum rules. Thanks.] |
|
steve2
Joined: 23 Nov 2008
Posts: 17
Location: Pensacola, FL
8.17 Dollars($)
|
| Posted: Wed Nov 26, 2008 12:57 pm Post subject: |
|
|
Dormantroot,
1) To have your PMI cancelled, you will have to bring your balance down to 78% or less of the lower of your purchase price or appraised value at the time of closing. Example: If your purchase price is $200,000 and the appraised value is $205,000 at the time of closing, you will have to pay the balance down to $156,000 for the PMI to automatically be removed.
2) A biweeky payment is nothing more than adding an additional payment per year towards your principal. To achieve the same result, take your monthly payment, divide it by 12, add that figure to your monthly mortgage payment every month and it will reduce your term from 30 years to about 23.5 years. Never pay someone a fee to do bi-weekly payments.
3) Yes, PMI can be deducted on your taxes for your primary residence, but consult your accountant for details on qualifying and the continuance in the future.
4) An escrow account is nothing more than collecting your taxes and insurance up front so that it can be divided out into your monthly payment for budgeting purposes. The laws vary depending on what state you are in, but in Florida, taxes become payable in November, and are not past due until April. Setting up your escrow account allows you to set aside this money (1/12th at a time) each month until the bill comes due the following year. It is common to collect for 12 months of insurance + 2 months reserves, and 2 to 4 months of property taxes.
I hope this was helpful.
"http://www.SteveRussellOnline.com/blog"
[Link deactivated as per forum rules. Thanks] |
|
smithsussane
Joined: 18 Sep 2008
Posts: 4546
Location: Alaska
445.32 Dollars($)
|
| Posted: Wed Nov 26, 2008 11:58 pm Post subject: |
|
|
Hi DORMANTROOT!
Welcome to forums!
As far as I know, if your down payment is less than 20%, then you have to pay for a PMI. So won't be needing it once you've made enough payments on your house that you own 20% or more of the property.
A bi-weekly payments will help you to make half-payment every two weeks instead of a full payment once each month. The interest rates will also be calculated on a bi-weekly basis. This will help you to own 20% of the property much faster than the monthly payments and thus you will be able to cancel the PMI.
Yes, there is a legislation which allows the taxpayers to deduct premiums paid for mortgage insurance in case the home buyers are purchasing their homes with less than 20 percent down payment. I think it will be available in 2009, but it will be better if you check it with a tax assessor.
Escrow account and impound account are same. You can check out the given link to know about escrow/impound account:
http://www.mortgagefit.com/impound-account.html
Feel free to ask if you have further queries.
Sussane |
|
