Mortgage PMI question

[downtoearth]

So we have PMI for our first mortgage (FHA loan). We've paid (never late) for 7 years, but we only have about 15% equity in the house (based on Zillow's estimate of it's worth right now).

When we got our second loan on a new house, our mortgage broker said something about being able to drop PMI after 5 years of consistent payments or 20% equity in the house. I haven't called her or our mortgage company to check on this, but has anyone done anything like this or have any insight on when you can drop PMI?

[WOT?*]

Typically it's 20% equity in the home. The S&L I used in Ohio would evaluate at 15% down with the likelihood of eliminating the PMI. You can request your lender review the PMI requirement but it won't guarantee that the PMI will be dropped. Some lenders are a strict 20% while others may have some leeway based on credit history and your history with them. It sounds like your guy may have given you a guideline of 5 years payments if the house doesn't appreciate or you don't pay down to 20% equity by that time.

[Deleted]

Not to hijack the tread but I got my loan through a broker who then sold to Wells Fargo. How do I know if it is 20% or 5 yrs or both for me?

[lmdbww]

We had an FHA loan on our first house and the 5 years of on time payments thing didn't apply, and you also couldn't use an appraisal unless you were fully refinancing. The only way to drop PMI was to have the loan paid down to 78% LTV.

[jenjen]

Jul 6, 2012 14:38:21 GMT -5 lmdbww said:

The only way to drop PMI was to have the loan paid down to 78% LTV.

We looked into FHA loans last year and I thought it was 78% LTV (not 80%) and a minimum of 5 years of payments.

We went with a 5% conventional loan that had a minimum of 12 months of PMI payments. After that point, we could pay for an appraisal and drop PMI if we had 20% equity.

Vigirl - I would assume this should be in your loan documents if you have copies still. Do you have an FHA or conventional loan? If it's FHA I would assume you would need to meet the 78% LTV and 5 years as above. For a conventional, you probably need 20% equity but each loan may be different on the time requirements. We had looked at a few products and conventional loans had longer PMI requirements.

[Deleted]

Jul 6, 2012 14:48:01 GMT -5 jenjen said:

Jul 6, 2012 14:38:21 GMT -5 lmdbww said:

The only way to drop PMI was to have the loan paid down to 78% LTV.

Vigirl - I would assume this should be in your loan documents if you have copies still. Do you have an FHA or conventional loan? If it's FHA I would assume you would need to meet the 78% LTV and 5 years as above.

It's FHA and we still have our loan docs. I will check tonight. Thanks! I hope it isnt 78% LTV

[thatgirl2478]

Jul 6, 2012 14:19:56 GMT -5 downtoearth said:

So we have PMI for our first mortgage (FHA loan). We've paid (never late) for 7 years, but we only have about 15% equity in the house (based on Zillow's estimate of it's worth right now).

When we got our second loan on a new house, our mortgage broker said something about being able to drop PMI after 5 years of consistent payments or 20% equity in the house. I haven't called her or our mortgage company to check on this, but has anyone done anything like this or have any insight on when you can drop PMI?

Here's what I found out in our situation:

Our PMI will be dropped when our loan is scheduled to reach 78% LTV on the original amortization schedule. Which means that it doesn't matter if you pay it down early, you will be paying off PMI until the date set by the amortization schedule. For us this means 2014 - even though we are at 72% LTV.

The only other way to drop PMI is to have the property reappraised - which is a $400 non refundable fee and there's NO way our property appraises at what we paid for it. In fact, if we refinanced what we owe on it now we would be financing 120% of the property's value.

[cricketwife]

Jul 6, 2012 14:30:55 GMT -5 vigurl said:

Not to hijack the tread but I got my loan through a broker who then sold to Wells Fargo. How do I know if it is 20% or 5 yrs or both for me?

I could be wrong but I don't think the terms of your loan change just because it gets sold....that would be really wrong if it did!

[jenjen]

Jul 6, 2012 14:50:14 GMT -5 vigurl said:

Jul 6, 2012 14:48:01 GMT -5 jenjen said:

Vigirl - I would assume this should be in your loan documents if you have copies still. Do you have an FHA or conventional loan? If it's FHA I would assume you would need to meet the 78% LTV and 5 years as above.

It's FHA and we still have our loan docs. I will check tonight. Thanks! I hope it isnt 78% LTV

I just remembered that they have a PMI section on the Wells Fargo site. Do you have an online account for your mortgage? Sign in then click on your mortgage loan. Then click on Escrow Details. At the bottom I have a section called PMI and it has my LTV and date projected for 80% LTV. That might be easier than going through mortgage paperwork.

[Deleted]

Jul 6, 2012 15:47:53 GMT -5 jenjen said:

Jul 6, 2012 14:50:14 GMT -5 vigurl said:

It's FHA and we still have our loan docs. I will check tonight. Thanks! I hope it isnt 78% LTV

I just remembered that they have a PMI section on the Wells Fargo site. Do you have an online account for your mortgage? Sign in then click on your mortgage loan. Then click on Escrow Details. At the bottom I have a section called PMI and it has my LTV and date projected for 80% LTV. That might be easier than going through mortgage paperwork.

That is so great. Off to the WF website now!

[downtoearth]

Thanks for the info. I'll call our mortgage people to check, but we have closer to 20% in it based on the price we bought at (compared to zillow) so maybe we are close to the 22% equity and 5+ years of payments for a typical FHA. It's not much, but it would be nice to rid ourselves of a little of the payment.