Home Buying in 95828>Question Details

areyes_76, Home Buyer in Santa Clara, CA

how to remove a pmi from loan?

Asked by areyes_76, Santa Clara, CA Sat Jun 22, 2013

i was told my house has increase in value about $40,000. how can i remove PMI from my FHA loan.

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Answers

10
The LTV will play an important factor in your intention to have the MI removed.
In my understanding, you need 20 percent at least before you can request for removal.

However, not sure about the exact date of implementation this year, all MI on FHA loans will be carried for the life of the loan.

Read your loan documents as mentioned by some of the members here. And contact your lender. Lender will not removed it unless you get involved.

Best of Luck.
0 votes Thank Flag Link Fri Aug 2, 2013
As long as you have had the current FHA loan for 5 years and 20% equity you can contact your Lender and ask them the process in removing the MI. FHA requires you keep the MI a minimum of 5 years even if 20% equity in the property exists.

You can also read the guidelines on HUD's website.
0 votes Thank Flag Link Tue Jun 25, 2013
The terms of your PMI can vary. Typically you can remove the pmi once you have 20% equity in your home. Contact your lender to see where you stand.
0 votes Thank Flag Link Mon Jun 24, 2013
You would need to speak with the financial institution holding the loan. As of April 2013 new FHA loans with PMI will have the PMI for the life of the loan.
0 votes Thank Flag Link Sat Jun 22, 2013
If you have 20% equity in your home you can refi to a conventional loan and get rid of the pmi. The FHA loans have rules about when PMI can come off.

I work with a great mortgage broker that can assess your situation. Contact me for further assistance.
0 votes Thank Flag Link Sat Jun 22, 2013
Excellent question! In fact, I am contacting many of my old clients to discuss this opportunity with them. With the homes increasing in value, many are realizing that they can demonstrate 20% equity in their property. In addition, many have mortgage rates closer to 5% or better.

To remove PMI depends on the terms of your originating loan. Some may allow you to remove PMI if you have had the loan for 5 years or more without any additional effort on your part, if you can demonstrate that you have 20% equity in the home. But in all cases where you can have a full appraisal that would demonstrate 20% equity in your home, you can do a refinance. This would create a new loan that does not include PMI and would most likely have a much lower mortgage rate.

You will want to contact a loan officer to consider a refinancing if your current loan does not have the conditions allowing you to just remove PMI automatically.
0 votes Thank Flag Link Sat Jun 22, 2013
It is my understanding that PMI will carry with an FHA loan for 5 years even if it appraises with 20% equity. If the loan is older than 5 years, by all means, refi down to today's low mortgage rates and eliminate the PMI.

I am happy to refer you to a loan officer that will be able to precisely answer your questions and help you with a refi.

Best,
David
0 votes Thank Flag Link Sat Jun 22, 2013
If you get a new appraisal and the property value comes in with at least 20% equity in your home, you can refinance and change you FHA loan to conventional.
0 votes Thank Flag Link Sat Jun 22, 2013
I understand, that recent changes in the procedure for this will make it harder:
New contracts are calling for 22%
and getting that increase in equity is going to be harder.

Read you Loan doc's and call an Appraiser:
I'm not even sure that the Lenders will accept your appraisal!
0 votes Thank Flag Link Sat Jun 22, 2013
An appraisal that shows the home to have 20% or more equity from your Bank can remove the PMI.
0 votes Thank Flag Link Sat Jun 22, 2013
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