Refinance / PMI?

If I own a property free and clear and want to take out a loan against it, will I have to pay PMI???

I'm not very clear on how that works.

Thanks.

Comments(3)

razzio28th September, 2004

you will typically either pay pmi or a increased interest rate if you have less than 20 percent equity.

It also varies by lenders, so the best thing to do is find a good mortgage broker and have him gather products and offer scenarios for you to see if pmi would be more beneficial or a higher interest rate.

If you plan on leaving 20% equity in, you wont pay pmi as far as i know.[ Edited by razzio on Date 09/28/2004 ]
honii4th October, 2004

If you go conforming you will likely have to pay PMI. You can refi any amount on the non-conforming side and still avoid PMI. I'm a loan officer and have loans up to 100% with no PMI. Conforming loans often offer a lower rate than non-conforming ones and can sometimes still be a better deal even w/ the PMI added in..

~Kesha
ceinvests4th October, 2004

manxious,

Since you own the property free and clear, are you intending to borrow more than 80% of its value? Have you looked at the option of just getting a heloc? Maybe you want to share some specifics so you can get more thoughts. PMI, private mortgage insurance, is usually only on loans of higher than 80% LTV.