Financing in Phoenix>Question Details

Manny, Home Owner in Hawaii

Getting rid of PMI options .

Asked by Manny, Hawaii Sun Aug 5, 2012

I BOUGHT A HOUSE IN NOV. FOR 500,000 AND IM PAYING 456,00 A MONTH FOR PIM CAN I GET RID OF THE PMI BY REFINANCING MY BALANCE OF 482,000 IT SEEMS THAT THE INTEREST RATES ARE A LITTLE BETTER THAN WHAT I GOT BACK IN NOVEMBER ANY SUGGESTIONS ARE APRECIATED

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Hello Manny:

Contrary to popular belief, it is no longer possible to get mortgage insurance cancelled simply by having an appraisal done to show you have 20% or more equity in your home.

Congress passed The Homeowners Protection Act of 1998 ("the Act"), which impacts all conventional loans with private mortgage insurance (PMI) and which closed after July 29, 1999. The basic provision is that PMI must be cancelled when the mortgage balance is 78% of the home's ORIGINAL value and monthly mortgage payments are current. There is no longer a provision which allows the cancellation simply based on an increased appraised value.

So, in order to stop paying the PMI you will need to refinance the loan and show, by an appraisal, that you have 20% equity in the home. As has been stated below, you can put down the monies needed to get to 20% equity OR you might be able to lower the PMI premium for each 5% decline in the Loan-to-Value (80.01 to 85.00 is lowest; 85.01 to 90.00 is a bit more; 90.01 to 95.00 is a bit higher; and, finally, 95.01 and up is the highest premium).

Please feel free to contact me, to help with the needed refinancing.

Bill Parker, CPA*
NMLS #223607
480-993-3080
Bill.Parker@LegacyG.com
0 votes Thank Flag Link Mon Aug 6, 2012
You would need to have 20% equity in the property. You have to have an appraisal done to see if you are in that position yet or not. Our values have increased here enough in some cases. If your home is in Hawaii, I don't know how the market is improving there. You could also re-finance and put more down so that you have 20% equity. It is definitely worth it.

Best Regards,

Brenda

Ron & Brenda Cunningham
West USA Realty
602-980-3133

*** Recognized in the Phoenix Business Journal as "One of the Top 50 Realtors in the Valley" ***

Search the Official, Active, FlexMLS for homes in the Phoenix Metro Area for FREE through our website at:
http://www.CunninghamHomesAZ.com
0 votes Thank Flag Link Mon Aug 6, 2012
If you put 20% down when you refinance(or your appraisal show 20% equity) you can eliminate the Mortgage Insurance. The cost can be reduced when you put down between 5-15% in a conventional loan. Avoid FHA loans to minimize the Mortgage Insurance.

I would contact Roswell Moore (480) 422-5095 Sun West Mortgage to get explore your options.

Loren Hoboy-Realtor
Central AZ Real Estate
LHoboy@centralAZhomes.com
Your Local Expert
623-688-0004
0 votes Thank Flag Link Sun Aug 5, 2012
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