Home Buying in 94564>Question Details

Johnsaldivar, Home Buyer in 94564

Question Regarding PMI

Asked by Johnsaldivar, 94564 Wed May 18, 2011

My Wife and I have purchased our first home. Appraised for 309,000, we are paying 302,000 with 3% down. Our payment show that PMI will drop off in about 10 years. Is there a way in which I can have it drop off sonner.

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Answers

5
Update:

As mentioned below, currently MI expires in five years and when loan to value drops to 78%

Effective June 3, 2013 MI Will No Longer Expire!

http://portal.hud.gov/hudportal/HUD?src=/press/press_release…
0 votes Thank Flag Link Sun Mar 3, 2013
The only way to have it drop off sooner is to refinance when the home increases in value, or pay extra towards principal each month. So you can reach the 78% mark sooner
0 votes Thank Flag Link Sun Mar 3, 2013
John:

Just in case you or another reader of your post obtained the home via an FHA loan:

FHA loans are quite different in this respect. With FHA you will have to pay Mortgage Insurance for a MINIMUM of 5 years, and until you have paid your original LOAN AMOUNT down to 78% (not that the loan amount is 80% of current market value, which is typical for non-FHA MI removal). For all but 15-year term mortgages, you will pay MI premiums for the GREATER of five years or until the amortized loan-to-value reaches 78 percent. This "78% or 5-year Rule" before Mortgage insurance can be terminated is covered here: http://www.hud.gov/offices/adm/hudclips/letters/mortgagee/fi…

Best, Steve
0 votes Thank Flag Link Thu May 19, 2011
Yes by all means, in most cases once your equity rises and the amount you owe falls below 80% loan to value you can submit a request to have PMI dropped. Should be in 2-3 years when prices spike again
Web Reference: http://www.ScottSellsNH.com
0 votes Thank Flag Link Thu May 19, 2011
John you would need to pay down the balance or refinace the home when you get to a 20% equity possition to make your PMI go away. Equity can be hit by appreciation or you paying extra monthly on your loan. The market will not stay like this forever so you should see some appreciation in the future.
0 votes Thank Flag Link Thu May 19, 2011
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