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happydays
LIF Adolescent
Member since 8/06 513 total posts
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working my way to 1000 posts!
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PMI ...need help with this
As a homeowner do we only pay PMI when we do not put 20% or more down on our mortgage? And once you have paid at least 20% off is that when you no longer have to pay PMI? So, does this also apply when you do some renovations and the value of your home increases and if we have it appriased and it shows that you the value of your house increases does this mean that you know longer have to pay PMI? Or am I completely confused and if so please straighten me out.
Thanks so much.
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Posted 4/4/07 10:47 PM  |
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MarathonKnitter
HAPPY
Member since 2/07 17374 total posts
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Re: PMI ...need help with this
seems like you understand it pretty well.
pmi is an insurance that you have to pay when you owe the lender more than 80% of the value of your home. as soon as you have 20% equity, let your lender know, so you no longer have to pay it.
ways to not have to pay pmi: put 20% down, have your property apriase higher than what you paid for it, pay additional monies on your mortgage payments, have a 80-20 mortgage.
pmi is something you want to get out from under ASAP because it's not money you get back.
hth
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| Posted 4/4/07 10:53 PM |
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happydays
LIF Adolescent
Member since 8/06 513 total posts
Name:
working my way to 1000 posts!
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Re: PMI ...need help with this
Ok, thanks. So for argument sake. If we put down 10% which is = to $10,000.00 and just had $12,000.00 worth of remodelling done would that necessarily raise the cost of our home $12,000. and if so how do I go about getting it appriased. Do I call our bank and have them come out and do an appraisal and if so does this cost us any money?
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| Posted 4/4/07 10:59 PM |
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anjerandunder
Positive thoughts worked!!!
Member since 6/06 1909 total posts
Name:
J
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Re: PMI ...need help with this
it cost a few hundred i think to have someone come out and they have very specific things that they consider to be renovations on the house. i would call the bank you have the mortgage through and ask them what they consider important enough in renovations to raise the value of your home. when i tried this, it seemed like such a hassel so we didn't even bother.
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| Posted 4/5/07 5:54 AM |
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MarathonKnitter
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Member since 2/07 17374 total posts
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Re: PMI ...need help with this
Posted by happydays
Ok, thanks. So for argument sake. If we put down 10% which is = to $10,000.00 and just had $12,000.00 worth of remodelling done would that necessarily raise the cost of our home $12,000. and if so how do I go about getting it appriased. Do I call our bank and have them come out and do an appraisal and if so does this cost us any money?
the $-amount you put into renovations does not necessarily equal $-amount in increased appraisal. it depends on what you do to the house, so if your immediate goal is to get rid of pmi, i would ask your rea to explain what renovations would give you the extra 10% you're looking for.
but... in theory, you're on the right track.
hth
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| Posted 4/5/07 9:00 AM |
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smdl
I love Gary too..on a plate!
Member since 5/06 32461 total posts
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me
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Re: PMI ...need help with this
Posted by libby2595
Posted by happydays
Ok, thanks. So for argument sake. If we put down 10% which is = to $10,000.00 and just had $12,000.00 worth of remodelling done would that necessarily raise the cost of our home $12,000. and if so how do I go about getting it appriased. Do I call our bank and have them come out and do an appraisal and if so does this cost us any money?
the $-amount you put into renovations does not necessarily equal $-amount in increased appraisal. it depends on what you do to the house, so if your immediate goal is to get rid of pmi, i would ask your rea to explain what renovations would give you the extra 10% you're looking for.
but... in theory, you're on the right track.
hth
Agreed! I would discuss with your lender what you indend on doing. That you planned on having the house appraised because you believe the house is now valued higher and that the PMI should be removed.
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| Posted 4/5/07 9:06 AM |
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happydays
LIF Adolescent
Member since 8/06 513 total posts
Name:
working my way to 1000 posts!
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Re: PMI ...need help with this
Thank you so much and it is good to know I am somewhat on the right track. We completely redid our bathroom so I know that definitely helps with the value of our home. Whether it is enough I am not sure. I will contact our bank, next, and let them tell me what they think.
Thanks again!
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| Posted 4/5/07 9:44 AM |
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-Lisa-
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Member since 5/05 6530 total posts
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Lisa
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Re: PMI ...need help with this
Lenders don't make it easy to remove PMI - its free money for them. Most banks will also have a time limit, usually one or two years before they'll even consider removing the PMI.
Renovations will help, but the appraisal is predominantly driven by the sale prices of comparable houses. A new bathroom isn't going to increase the value of your house by 10%, but it helps.
questions to help determine if you can lose the PMI:
-how long have you been in your house?
-are similar houses selling for more or less than you paid?
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| Posted 4/5/07 10:42 AM |
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happydays
LIF Adolescent
Member since 8/06 513 total posts
Name:
working my way to 1000 posts!
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Re: PMI ...need help with this
Thanks! We have been here for over one year and a simiiar home in our neighborhood just sold for $20,000 more than what we paid fo ours.
I think I am going to wait until we have been here for two years and then contact our lender. Because in the meantime, we will hopefully continue to make improvements.
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| Posted 4/5/07 2:56 PM |
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MsSissy
xoxoxo
Member since 3/07 39159 total posts
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Re: PMI ...need help with this
We didn't do any renovations on our home when we had it re-appraised.
Luckily, the value increased enough that we were able to get rid of the PMI's.
Be sure to check with your bank. Ours would not accept an outside appraiser.
Good Luck!
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| Posted 4/5/07 3:12 PM |
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Pooka
Oh Happy Day!!
Member since 11/06 5689 total posts
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Re: PMI ...need help with this
Our mortgage broker said that you should NEVER pay PMI. He said there is no reason for it and you, basically, are giving them your money. We did not give 20% down. We got around it by breaking our payments up into 2 mortgages. We have a larger mortgage payment and then one smaller one that is about $400 per month. That is how we got around paying PMI.
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| Posted 4/5/07 10:28 PM |
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sunnyplus3
:)
Member since 11/05 8749 total posts
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Re: PMI ...need help with this
Posted by Bubbs
Our mortgage broker said that you should NEVER pay PMI. He said there is no reason for it and you, basically, are giving them your money. We did not give 20% down. We got around it by breaking our payments up into 2 mortgages. We have a larger mortgage payment and then one smaller one that is about $400 per month. That is how we got around paying PMI.
My PMI is way less than $400 per month & although its not tax deductable like a second loan, it also doesn't have an adjustable rate.
When we crunched the #'s, paying PMI for two years until we could get rid of it was less than having a second loan, with less risk since the only second loans we were offered were ARMs.
We had 120k in equity the day we closed so we knew we could get rid of it.
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| Posted 4/6/07 6:37 AM |
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MegZee
My bunny
Member since 5/06 8777 total posts
Name:
Meaghan
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Re: PMI ...need help with this
Posted by KellyFG
Posted by Bubbs
Our mortgage broker said that you should NEVER pay PMI. He said there is no reason for it and you, basically, are giving them your money. We did not give 20% down. We got around it by breaking our payments up into 2 mortgages. We have a larger mortgage payment and then one smaller one that is about $400 per month. That is how we got around paying PMI.
My PMI is way less than $400 per month & although its not tax deductable like a second loan, it also doesn't have an adjustable rate.
When we crunched the #'s, paying PMI for two years until we could get rid of it was less than having a second loan, with less risk since the only second loans we were offered were ARMs.
We had 120k in equity the day we closed so we knew we could get rid of it.
the second mortgage doesnt have to be an ARM - you can get fixed.
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| Posted 4/6/07 7:00 AM |
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sunnyplus3
:)
Member since 11/05 8749 total posts
Name:
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Re: PMI ...need help with this
Posted by Meaghan729
Posted by KellyFG
Posted by Bubbs
Our mortgage broker said that you should NEVER pay PMI. He said there is no reason for it and you, basically, are giving them your money. We did not give 20% down. We got around it by breaking our payments up into 2 mortgages. We have a larger mortgage payment and then one smaller one that is about $400 per month. That is how we got around paying PMI.
My PMI is way less than $400 per month & although its not tax deductable like a second loan, it also doesn't have an adjustable rate.
When we crunched the #'s, paying PMI for two years until we could get rid of it was less than having a second loan, with less risk since the only second loans we were offered were ARMs.
We had 120k in equity the day we closed so we knew we could get rid of it.
the second mortgage doesnt have to be an ARM - you can get fixed.
Right, but we were only offered an ARM with our no-doc loan & our three week out closing date.
Everyone's situation is different, I'm explaing why PMI was better for us.
It would been EVEN better if the new rule about it being deductible was in place
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| Posted 4/6/07 7:04 AM |
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MegZee
My bunny
Member since 5/06 8777 total posts
Name:
Meaghan
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Re: PMI ...need help with this
Posted by KellyFG
Posted by Meaghan729
Posted by KellyFG
Posted by Bubbs
Our mortgage broker said that you should NEVER pay PMI. He said there is no reason for it and you, basically, are giving them your money. We did not give 20% down. We got around it by breaking our payments up into 2 mortgages. We have a larger mortgage payment and then one smaller one that is about $400 per month. That is how we got around paying PMI.
My PMI is way less than $400 per month & although its not tax deductable like a second loan, it also doesn't have an adjustable rate.
When we crunched the #'s, paying PMI for two years until we could get rid of it was less than having a second loan, with less risk since the only second loans we were offered were ARMs.
We had 120k in equity the day we closed so we knew we could get rid of it.
the second mortgage doesnt have to be an ARM - you can get fixed.
Right, but we were only offered an ARM with our no-doc loan & our three week out closing date.
Everyone's situation is different, I'm explaing why PMI was better for us.
It would been EVEN better if the new rule about it being deductible was in place
I agree that every situation is different, and sometimes PMI is the best solution - I just wanted to point out to people who dont know much about it that you can get a fixed rate.
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| Posted 4/6/07 7:09 AM |
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