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sdramkissoon76 · Joined: 06 Aug 2008 Posts: 1 1.96 Dollars($)

Let me apologize in advance for the length of my blurb, but the box told me to provide details, so here goes. We bought our home in 2006 for 234K. We put 23K down on the house. In the past 2 years we have invested another approximately 22K in the house (pool, deck, stairs, upgraded the electric, replaced part of the roof). From our last statement, we owe 205K on the house. My concerns are twofold - We pay a PMI on our mortgage of approximately $150/month. The PMI company is Triad and our mortgage company is Countrywide. We called Triad and they said that once our equity is 20% Countrywide will drop the PMI. Has anyone had any experience with this type of situation? I'm guessing that I need to get an appraiser to provide the value to Countrywide. Does our investment in our home count anything toward getting rid of the PMI? The house next door just got sold for 250K. If I estimate our home value at 250K, that would mean we would need to be @200k, to get rid of the PMI. Also, can you get a 2nd mortgage if you have a PMI on the house? We are looking to consolidate all our bills(approximately 30K) into one payment.

Niicss · Posted: Thu Aug 07, 2008 1:56 am Post subject:

Hi sdramkissoon.

The PMI Company has rightly informed that when you have 20 percent equity of the property then you will need not to pay the Private Mortgage Insurance (PMI) any longer. The amount that you have spent for the property improvements will certainly increase the property value. I feel you should inquire to the mortgage company to know how much equity do you have or when can you stop paying the PMI.

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Your mortgage that you signed at closing will have details as to your PMI and under what circumstances you can get it removed early. If you call your lender's customer service department, they can tell you if you are eligible to have a new appraisal done to see if the pmi can be stopped. There are certain circumstances that could prevent a lender from agreeing to this such as late payments on your mortgage, etc. Freddie Mac and Fannie Mae also have specific time requirements for being eligible for early removal of pmi. Your lender will be able to tell you the processfor your particular loan.

(30 year fixed FHA loans require pmi to stay on the loan for at least 5 years, I believe, so I am assuming you dont have an FHA loan.) If you have good payment history and your loan is Freddie or Fannie, the lender will likely tell you that you can pay for a new appraisal (the lender will order the appraisal after you send in payment for it) and if the new appraised value is high enough, then you can have the PMI removed. This process can take 60-90 days. (I used to work in mortgage servicing for a large lender and I dealt with PMI questions from customers a lot. I hope you can get it removed!!

jmiller · Joined: 04 Sep 2008 Posts: 13 5.75 Dollars($)

Your LTV% needs to be 80% or less to avoid PMI in the refinance process. Depending on your current value/equity will determine if there is enough room to refinance, get rid of the PMI and payoff your bills.

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gmakerley · Posted: Fri Sep 05, 2008 9:16 am Post subject:

to address the pmi question, what has been stated above is true. you need to get to no more than 80% to eliminate the pmi, though i think you'll find that it is more likely you'll need to be at 78% these days. formulae have changed greatly in the past 12-18 months.

your closing documents ought to reflect the situation. you definitely would have to have an appraisal of the property done to reflect the current value.
i believe you'll find that they'll want 24 consecutive months of timely payments to consider dropping the insurance.

as for home equity loans, there are lending institutions out there that will lend in your situation, but they are becoming rarer every day. not many lenders want to risk being in second position in these times. your likely best bets are local, institutional lenders, such as a community bank or a credit union, i suspect.

lisascherzer · Joined: 04 Jan 2008 Posts: 755 1.12 Dollars($)

Yes to the first question of needing an appraisal for countrywide to take off the PMI insurance. Secondly, you can have PMI on your first mortgage to take out a second mortgage. However most lenders are only going 90% of the value of the home so you might be looking at a 20,000 to 25,000 second.

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I would like some advice about a 2nd Mortgage