getting rid of PMI on current mortgage (insurance, refinance)

[jperryrocks]

Has anybody had success in dropping PMI off their current mortgage without a REFI?

I've had my house ~4 years and with the market going up, I'm probably about ~30% equity right now. I'm assuming the banks are not going to go out of their way to drop it off. I was looking online and saw that you need to draft a letter and send it to them.

It's gone down slightly to just around 200/mo....it was around 220 when I signed my mortgage. I locked into 3.75 on my rate and pretty happy with things, and don't really want to refi if I don't have to.

[JaPaKoMom]

Your best bet is to have your loan >20% less than your purchase price. You could also get an appraisal, but that will cost you.

[adams_aj]

Once you have 20% equity on your home, you no longer are required to carry PMI. It's to protect the lender--not you. Send them the letter ASAP, telling them to drop it immediately. You should not have to refinance to get it dropped. It's an unnecessary expense.

[wheelsup]

It's automatic at <78% IIRC, but that is based on the original loan value. Check your closing docs, I'm sure there is language in there about it.

[The Villages Guy]

Originally Posted by adams_aj

Once you have 20% equity on your home, you no longer are required to carry PMI. It's to protect the lender--not you. Send them the letter ASAP, telling them to drop it immediately. You should not have to refinance to get it dropped. It's an unnecessary expense.

20% equity from the price at time of appraisal for the mortgage. If one wants to use the increased equity due to market appreciation, then one normally has to pay for a new appraisal.

[wake74]

I've done it multiple times with WF, when we carried two mortgages for a few months during relocations. When we sold the first house, we paid down the new one to 78%, and they had no problem getting rid of PMI. I've never tried to eliminate it based upon appraisal appreciation alone. The only time I inquired about that with a mortgage company, there was a minimum period after the loan creation to request (and pay for) an appraisal. That's like 7 houses ago, but I think it was 2 years before that particular lender would consider dropping PMI based upon appraisal alone.

[Waterboy526]

If they won't drop it without an appraisal and you're paying $200 a month in PMI, I'd pony up the $400+ for an appraisal and then send the letter. It'll pay for itself within 3 months.

[Melissa Schwartz]

Originally Posted by jperryrocks

Has anybody had success in dropping PMI off their current mortgage without a REFI?

I've had my house ~4 years and with the market going up, I'm probably about ~30% equity right now. I'm assuming the banks are not going to go out of their way to drop it off. I was looking online and saw that you need to draft a letter and send it to them.

It's gone down slightly to just around 200/mo....it was around 220 when I signed my mortgage. I locked into 3.75 on my rate and pretty happy with things, and don't really want to refi if I don't have to.

So the first thing you need to do is call your mortgage servicer and ask to have your MI dropped, they will mail you a letter explaining your options. One of the options will be to have the servicer order an appraisal. Usually the agreement that you sign at closing states that the MI is based on ACTUAL payments made and the value at time of purchase. it's possible the servicer will not take into account appreciation, and will make the decision based on the purchase price and current loan amount UNLESS you've made structural changes to the home.

You can read more at - When can I remove private mortgage insurance (PMI) from my loan? > Consumer Financial Protection Bureau

Good Luck!

[BoBromhal]

your loan balance will need to be 80% or less of the original purchase price of the home.

[MikeJaquish]

Originally Posted by Melissa Schwartz

So the first thing you need to do is call your mortgage servicer and ask to have your MI dropped, they will mail you a letter explaining your options. One of the options will be to have the servicer order an appraisal. Usually the agreement that you sign at closing states that the MI is based on ACTUAL payments made and the value at time of purchase. it's possible the servicer will not take into account appreciation, and will make the decision based on the purchase price and current loan amount UNLESS you've made structural changes to the home.

You can read more at - When can I remove private mortgage insurance (PMI) from my loan? > Consumer Financial Protection Bureau

Good Luck!

So, possibly a refinance could be in order to tap appreciation equity to eliminate PMI?
Except, at 3.75, He has a dandy rate already...