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]
If there credit is decent and they have 80% equity in home(appraised) they can.
Credit is great and they are pretty close to having 80% equity in home, but let's pretend that they don't...
[addsig]
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]
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]
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
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.