Home Buying in 01843>Question Details

hector h,, Other/Just Looking in 03079

how to get pmi waived?

Asked by hector h,, 03079 Mon Mar 18, 2013

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Larry Tollen’s answer
This can only happen after a period of time (typically around 7 years) or if you're able to show that you now have at least 20% equity built up in your home. In other words, your homes current market value is $200,000 and you only owe the lender $160,000 on your mortgage. As others have suggested you may contact your lender directly to request that they have an appraisal done if you believe you've got enough equity built up. You will have to pay for the appraisal. so you want to be certain and not right on the edge.
1 vote Thank Flag Link Tue Mar 19, 2013
Hi hector h,
My experience says:
If this is for an existing loan, you need to have the equity and be able to prove it with an appraisal.
If it is for a new loan, you still need the equity, or a special program that allows for "extra" loans that are usually subordinate to the first.

I would contact a local lending professional to help with this answer and to save time and money.

(Please note: when you choose an answer as a Best Answer, or at least give a thumbs up, it helps those who answer questions here.)
0 votes Thank Flag Link Wed Mar 20, 2013
thank you all! this really helped!
0 votes Thank Flag Link Tue Mar 19, 2013
Hi Hector,

If you already have a loan with PMI the only way to remove the PMI is to refinance if you are certain that the value of your property is at least 20% higher. If you trying to purchase a home with no PMI Terry Fansworth answers are correct!
0 votes Thank Flag Link Tue Mar 19, 2013
Hector,

If you don't have 20% dow but have 5-10% we lenders can do LPMI ) lender paid mortgage insurance or we can get use a PMI Company that can offer you several options either to buy out the PMI or do a split premium, etc. Contact a lender in your area and they can further explain how to accomplish this.
0 votes Thank Flag Link Tue Mar 19, 2013
There are various ways to do this.

1. Put 20% down (i.e. a conventional loan)

2. Use HomePath financing. You'd be limited to Fannie Mae owned properties in this case. Fannie created a set of guidelines that lenders must follow to entice buyers to purchase these properties. The caveat is that the interest rate if often higher here.

3. 80/10/10 or 80/15/5 financing. Essentially, if you have 10% or 15% to put down, you can secure two separate loans for the remainder - thus avoiding PMI (one loan for 80%, another for the remaining 10%). The "catch" here is that often the interest rate on the second financing product is higher (i.e. a home equity line of credit, etc).

Also, keep in mind, with the above examples - mortgage interest is fully tax deductible (for now), while PMI is not. So, in my opinion - if I had to choose between a slightly higher interest rate, or paying PMI until I've reached 20% equity in my home - I'd take the higher interest rate (depending on how high it is). This is only my opinion however - you'll need to take into account your personal situation & the interest rate you are quoted, crunch the numbers, and decide what's right for you.

Your best bet is to consult with a mortgage broker to explore all your options, and what makes the most sense from a financial pespective given your individual situation.
0 votes Thank Flag Link Tue Mar 19, 2013
Larry your partially right, the 20% is correct but just because you've paid down your mortgage does not mean that you have 20% equity. Especially in falling markets as most of the country has experienced.
0 votes Thank Flag Link Tue Mar 19, 2013
Larry's answer below is quite insightful and a full picture addressing your question!
0 votes Thank Flag Link Tue Mar 19, 2013
Contact your lender, most likely they will require an appraisal to show that your loan to value is 80% or greater.
0 votes Thank Flag Link Tue Mar 19, 2013
i heard of a program where even thou youd pay 5% down u dont pay pmi...
0 votes Thank Flag Link Mon Mar 18, 2013
Call your lender and let them know you have 20% equity.
0 votes Thank Flag Link Mon Mar 18, 2013
Not sure what you mean by 'waived'. Are you currently in a home and paying pmi or are you shopping for a property, if it is the latter, have you looked into MassHousing loan program?
0 votes Thank Flag Link Mon Mar 18, 2013
Thanks Sarah thats what i was talking about, i saw the rates are higher thou. is it worth it?
Flag Tue Mar 19, 2013
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