How To Get Rid Of PMI? Private Mortgage Insurance

Here's the deal,

I have a homeowner who has a 30 year mort at 8% and pays PMI on top of that, so their payments are $800 a month, with a total mortgage of $71,000.

I have people very interested in lease/optioning the home, that I want to put in, but that payment is not possible for that size home, etc.

What can the homeowner do to get rid of that PMI, can they refinance? If they do refinance, will their payments be lower, and remember I will have the home sold within two years no problem.

Thanks,

Christian "The Solutions Kid" Beebe
[addsig]

Comments(6)

  • dgtop29th October, 2003

    If there credit is decent and they have 80% equity in home(appraised) they can.

  • SolutionsKid29th October, 2003

    Credit is great and they are pretty close to having 80% equity in home, but let's pretend that they don't...
    [addsig]

  • SolutionsKid29th October, 2003

    What about a Piggyback or 2nd TD Home Loans?

    I have heard that many lenders will allow you to avoid private mortgage insurance (PMI) by combining a first mortgage and a ‘piggyback’ second mortgage. This way you can reduce your monthly payments below a loan with PMI.

    If this is true, can they just refinance into this with another lender or how would that work?
    [addsig]

  • classimg29th October, 2003

    The seller must find a lender who is willing to sit in second position. Maybe they can refinance with a 70/13 (Seventy percent first, 13 percent second). The seventy percent should reduce the need for PMI and possibly offset with a better interest rate. The seller can also use an adjustable rate mortgage which is a cheaper interest rate then fixed.

    Eric & Rosa
    [addsig]

  • rajwarrior29th October, 2003

    Pretty close to 80%? Has it been appraised lately? If it's close, the lender will make sure that the appraiser gets it there. Also, refi appraisals are almost always higher than a purchase appraisal for that very reason, banks want to loan the money. If it appraises right, problem solved.

    Must be an old loan at an 8% rate. Rates are now around 6% (depending on area, credit, etc) for homeowners. That alone would drop the payment alot.

    Getting a 2nd may work. However, interest rates for 2nd's are generally high and usually don't reduce the payment much, if any, from a 1st with PMI.

    Roger

  • InActive_Account29th October, 2003

    Usually it takes two things

    1. An appraisal
    2. A mortgage payment history of
    generally no 30 day lates over the
    past 12 months.
    Check with the lender to be sure.

Add Comment

Login To Comment