Can I prepay PMI?

Guest 0.10 Dollars($)

My client wants to pre-pay his PMI. The loan broker is saying he can't. Is that true or can you always pre-pay the PMI? The loan is "My Community" Bank of America. Thanks

larry · Joined: 27 Jun 2007 Posts: 3328 473.51 Dollars($)

Hi,

Welcome to the forum.

No, the loan broker is not saying the truth as PMI premiums can be prepaid. But it makes no sense to prepay PMI as PMI fees are not tax deductible. Moreover, the PMI payments are amortized over the entire life of the loan. So, I would advice you not to do this.

Samantha

Hi Max,

Welcome to the forum.

PMI premiums can be prepaid but I don't know whether Bank of America allows for it.

One reason of not paying PMI (as I see) is that, you may have to sell property and pay off the mortgage prior to the end of the loan term. Then you will be losing your money on the premiums which you have prepaid. Also, the premiums are currently tax deductible for loans originated in 2007. So, if you have a loan taken out this year itself, then you will be eligible for the deductions on the monthly premiums. Thus, it is better not to prepay PMI premiums. Again, if it's a loan from Bank of America then they will be able to tell you better.

Hope this helps...

God bless you.

Samantha

ckalvesmaki · Posted: Fri Sep 21, 2007 7:11 am Post subject:

There are programs that do allow for the prepayment of PMI......however mycommunity is not one of them. I would assume that this is a 100% loan and generally speaking the loan programs available at 100% do not allow for the pre-pay of PMI.

livinginnky · Posted: Fri Sep 21, 2007 9:01 am Post subject:

How much in advance is he looking to prepay?

All times are GMT - 7 Hours

Page 1 of 1