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Perry Said:

My loan officer says i need PMI insurance?

We Answered:

As far as I know, the calculations are done using the purchase price, not the appraisal price. (It's possible that it's the lower of the two.) To avoid PMI (which I'd always want to avoid if I could), it would seem like 20% of the $170k purchase price (i.e. $34k) would be enough, so I'm not sure what the other $6k is for. There are some additional fees that the buyer has to pay, but I wouldn't think they should be that much. Are there "points" on the loan? I guess that could be enough to do it, especially if it's something like 2 points.

Carol Said:

is there a real estate gureu out there? what is the formula to calculate the PMI Insurance?

We Answered:

From what I've seen, PMI ranges between .5% and 1% of the original loan amount annually, and it depends on the company the lender chooses and the type of loan you have. For instance, back when they were doing Stated Income loans, PMI on those loans was higher than PMI on a regular loan because of the higher risk.

If you put 20% down, there will be no PMI required.

If you're putting 3.5% down, it sounds like you might have an FHA loan(?). Their requirements are actually different. There's an upfront amount required, as well as monthly payments, with an FHA loan. With regular loans, however, it's just the monthly PMI (unless you opt to pay the entire PMI up front).

Once you reach 80% loan to value (LTV), you can request to have your PMI cancelled. Once you reach 78%, the lender is REQUIRED by law to cancel your PMI.

Heather Said:

PMI Insurance, how does it work?

We Answered:

PMI stands for "private mortgage insurance" is for the protection of the lender in the event you default on the mortgage, it is not for the homeowner.

If your mother and brother were on the mortgage together, and she passed away, then yes, your brother is fully responsible for the payments.

Your brother will not have to pay estate taxes on the home, because your brother is on the title and did not legally inherit the house. That is the benefit of having another family member on the title prior to a death.

However, if both of them and let's say, your mother was on the Deed, then her estate would be responsible for the mortgage, in the event your brother wasn't on it.

The bank doesn't care who they get their payments from, as long as they do. If someone doesn't pay it, they will foreclose on the home, which is against the estate.

You just have to decide whether or not you want to keep the house or not. I would also speak with a local Real Estate attorney for further assistance to make sure your rights are protected.

Edgar Said:

can you have your house appraised to drop PMI insurance?

We Answered:

First off, check your loan agreement.

You were given a document that showed when it would be eligible to be dropped based on the loan's declining balance. It also explained your right to petition for removal of the PMI earlier than that date. Normally the loan must age for 2 or 3 years before the lender will consider an early removal and if that's the case it will say so.

You'll need to get the formal appraisal first, and then ask to have PMI dropped using that as a basis for your request. There's simply no way around that.

Just find out what the bank's requirements are for appraisers. Some have a list of approved local appraisers while others only require state certification.

Troy Said:

PMI Insurance - What does the Mortgage Company get?

We Answered:

They usually get the difference between the outstanding balance owed and 80% of the initial loan amount.

For example, if you bought a $300,000 house with a $270,000 loan (90% loan). An 80% loan would have been $240,000. At 8 years, suppose, $247,000 is still owed. Also, suppose that the foreclosure realizes only $200,000. Then, the bank will get $7,000 = $247,000 minus $240,000.

June Said:

How long would I have to pay my PMI insurance if my loan is 260000 on a 30 year?

We Answered:

You have to pay the PMI until the loan balance is paid down to 78% of the property's value. For the first few years they will use the purchase price as the value. Later they may let you pay for a new appraisal and go with that.

Sam Said:

What numbers (home value, mortgage balance etc.etc..) determine whether or not one can drop PMI insurance?

We Answered:

Generally, once you have 20% equity, you can drop PMI. My mortgage states the loan balance must fall below 80% of the original mortgage or 80% of the current balance, whichever is less. That means if the home value increases, I can't drop PMI any sooner, but it it Drops, I have to pay more before I can drop PMI.

If you refinance, and have 20% equity at that time, the new mortgage should not require PMI.