Told I cant get rid of PMI til 34K more or 3 yrs on FHA loan?

[bajaunderground]

Re: Told I cant get rid of PMI til 34K more or 3 yrs on FHA loan?

here is Wells Fargo's reply



In reviewing your account, I find that you do not pay private mortgage
insurance (PMI), but rather a different type of mortgage insurance known
as mortgage insurance premiums (MIP). While we are unable to provide the
mortgage insurance deletion requirements via email, I am happy to report
that a letter detailing this information has been sent to your mailing
address of record. Please allow up to 10 business days for receipt. I
regret any inconvenience this delay may cause.



what is the difference in MIP?

MIP is the same thing as PMI, but rather than being backed by a "private" insurance company (Conventional type loans), your loan is backed by FHA. To even make it more confusing if you have a VA loan, they don't require mortgage insurance (MIP or PMI)...they "guarantee the loan". Which to a lender means roughly same thing, but it's just what it's called!?

FHA requires an up front premium (~1.5%) for using their product and a monthly fee. Conventional loans only require a monthly PMI fee (based on down payment, L-T-V and risk factors). VA has a "funding fee" they charge up=front (it changes, but first time use is 2.5% of loan amount added to the loan, no monthly fee. If a disabled veteran it can be waived? Subsequent use the fee increases to ~3.8% all depends on if you want to put any money down?)

 

[hungupthespikes]

Re: Told I cant get rid of PMI til 34K more or 3 yrs on FHA loan?

here is Wells Fargo's reply



In reviewing your account, I find that you do not pay private mortgage
insurance (PMI), but rather a different type of mortgage insurance known
as mortgage insurance premiums (MIP). While we are unable to provide the
mortgage insurance deletion requirements via email, I am happy to report
that a letter detailing this information has been sent to your mailing
address of record. Please allow up to 10 business days for receipt. I
regret any inconvenience this delay may cause.



what is the difference in MIP?

PMI and MIP: Understanding Mortgage Insurance

 

[thumpar]

Re: Told I cant get rid of PMI til 34K more or 3 yrs on FHA loan?

I will be going through trying to get PMI dropped next month. We have a conventional loan and when signing were told it is required for at least 2 years. A friend of mine who recently was doing mortgage loans told me I can either refinance or talk to the lender and see what they require to get it dropped. At 3.5% I don't want to refinance to get a higher rate and closing costs on top. We closed 2 years ago from tomorrow and will be working on it at the start of the month.

 

[ezbtr]

Re: Told I cant get rid of PMI til 34K more or 3 yrs on FHA loan?

I go this from Wells Fargo, a shortened version for my FHA loan - " Protects investor in case of default, minimum 5 years, expires when loan equals 78% LTV ratio/$166K, current principal balance is $201K, a new appraisal WILL NOT be taken into consideration", if I want to send a check for 34K, that WILL get rid of PMI, but hey then less of a tax write off, correct?

 

[bruceb58]

Re: Told I cant get rid of PMI til 34K more or 3 yrs on FHA loan?

I go this from Wells Fargo, a shortened version for my FHA loan - " Protects investor in case of default, minimum 5 years, expires when loan equals 78% LTV ratio/$166K, current principal balance is $201K, a new appraisal WILL NOT be taken into consideration", if I want to send a check for 34K, that WILL get rid of PMI, but hey then less of a tax write off, correct?

Then you should crunch the numbers and refi with a conventional loan if it saves you money.

 

[ezbtr]

Re: Told I cant get rid of PMI til 34K more or 3 yrs on FHA loan?

Then you should crunch the numbers and refi with a conventional loan if it saves you money.

did try a while back, nothing there to help me at my rate 3.5%

 

[tpenfield]

Re: Told I cant get rid of PMI til 34K more or 3 yrs on FHA loan?

Years ago, I was able to wiggle out of PMI after a few years, mostly because we were close to 20% down when we originally financed.

your best bet would be to re-finance as that will 'reset' your loan-to-value with the new financing.

 

[bruceb58]

Re: Told I cant get rid of PMI til 34K more or 3 yrs on FHA loan?

did try a while back, nothing there to help me at my rate 3.5%

What is the MIP costing you every month?

 

[ezbtr]

Re: Told I cant get rid of PMI til 34K more or 3 yrs on FHA loan?

What is the MIP costing you every month?

approx $225 a month

 

[ezbtr]

Re: Told I cant get rid of PMI til 34K more or 3 yrs on FHA loan?

approx $225 a month

oops, $210 a month PMI

 

[bruceb58]

Re: Told I cant get rid of PMI til 34K more or 3 yrs on FHA loan?

oops, $210 a month PMI

So basically it is 1%, and a 4.5% conventional loan is the break even point. Anything lower and you save money.

 

[ezbtr]

Re: Told I cant get rid of PMI til 34K more or 3 yrs on FHA loan?

So basically it is 1%, and a 4.5% conventional loan is the break even point. Anything lower and you save money.

I could refi at 4.3% get rid of PMI and save $90 a month, but will be more expensive over the period of the total loan, you can't get 3.5% locked at 30 years anymore

 

[bruceb58]

Re: Told I cant get rid of PMI til 34K more or 3 yrs on FHA loan?

I could refi at 4.3% get rid of PMI and save $90 a month, but will be more expensive over the period of the total loan, you can't get 3.5% locked at 30 years anymore

Yep. Many variables. If you are actually thinking about leaving like your other thread said, it would be worth doing a no cost refi and sell your house in 3 or 4 years. If you were staying longer, then you should keep this loan and get the MIP knocked off the earliest you can.

 

[ezbtr]

Re: Told I cant get rid of PMI til 34K more or 3 yrs on FHA loan?

Yep. Many variables. If you are actually thinking about leaving like your other thread said, it would be worth doing a no cost refi and sell your house in 3 or 4 years. If you were staying longer, then you should keep this loan and get the MIP knocked off the earliest you can.

plan is to keep place, maybe move depending on work and son when he is 18 (2.75 yrs), rent out (currently would be $1800 - 2000 a month) buy lots cheaper place where cost of living is a whole lot less, TX, LA, NC, etc

 

[fishrdan]

Re: Told I cant get rid of PMI til 34K more or 3 yrs on FHA loan?

oops, $210 a month PMI

Schnikies!

And I thought I was getting hosed years ago by paying $90 for PMI.

 

[bruceb58]

Re: Told I cant get rid of PMI til 34K more or 3 yrs on FHA loan?

Schnikies!

And I thought I was getting hosed years ago by paying $90 for PMI.

May be similar to what you were paying. Basically, it's 1%.

 

[thumpar]

Re: Told I cant get rid of PMI til 34K more or 3 yrs on FHA loan?

May be similar to what you were paying. Basically, it's 1%.

1% of loan amount per year or something else.

 

[fishrdan]

Re: Told I cant get rid of PMI til 34K more or 3 yrs on FHA loan?

May be similar to what you were paying. Basically, it's 1%.

.... LOL Yep!

It was 1%,,, of 90K

Paid PMI for something like 2 years and refied to get rid of it. But I guess that was back in the good ol' days (bad ol' days?) when they would let anything fly.

 

[thumpar]

Re: Told I cant get rid of PMI til 34K more or 3 yrs on FHA loan?

I just talked with my broker. She said the law recently changed. For FHA you can never drop it and on conventional it is 11 years required. I am not sure how recent that changed but she said we got in before the change. She is going to get a market analysis for us to see if we can try to get it dropped.

 

[bruceb58]

Re: Told I cant get rid of PMI til 34K more or 3 yrs on FHA loan?

I just talked with my broker. She said the law recently changed. For FHA you can never drop it and on conventional it is 11 years required. I am not sure how recent that changed but she said we got in before the change. She is going to get a market analysis for us to see if we can try to get it dropped.

June 3, 2013 is the deadline from what I understand.