Refinance Mortgage

[black2002ls]

There is no set time for PMI to fall off, just a minimum amount of time required for it to be on the loan (in some cases). If you have PMI, you must pay the loan down to 78% of the value of the house for it to automatically come off. Paying down 20% of your original loan would technically put you below the 78% Loan-To-Value mark (unless you didn't put anything down) so that's technically true.

Depending how far you are into the 30 year term, you may get a better bang for your buck at the normal 15 year payment instead of paying additional principal on the existing 30, even after the cost of refinancing.

PMI is for the life of the loan with an FHA loan correct? To ditch it we would have to refi with 20% down or pay it down to 78% of original loan value then refi? I have been curious about that since we closed on our house.

[AdamLX]

PMI is for the life of the loan with an FHA loan correct? To ditch it we would have to refi with 20% down or pay it down to 78% of original loan value then refi? I have been curious about that since we closed on our house.

FHA case number assigned on or after 6/3/13...
LTV 90.01% and higher is for the life of the loan.
LTV 90.00% and lower is for 11 years at the earliest without a refinance.

[akfodysvn]

I had an FHA loan and my PMI went buhbye after I paid 20% of the value. There was never any question of this each time I asked my local bank.

I refinanced down to 3.25 and my home appraised higher and got me out of PMI and a lower rate. I was only in the house for about 2 years before I refinanced and it was well worth it bringing our payment down a few $100 a month

[Mike69]

There is no set time for PMI to fall off, just a minimum amount of time required for it to be on the loan (in some cases). If you have PMI, you must pay the loan down to 78% of the value of the house for it to automatically come off. Paying down 20% of your original loan would technically put you below the 78% Loan-To-Value mark (unless you didn't put anything down) so that's technically true.

Depending how far you are into the 30 year term, you may get a better bang for your buck at the normal 15 year payment instead of paying additional principal on the existing 30, even after the cost of refinancing.

I'm only 5 years into my 30 year term. I'd rather use the extra $300 to pay down my rental property. Only owe about 20K and plan on having it paid off in 2 years or less. Then I will throw everything I can at my current home to get it paid down.

[black2002ls]

I had an FHA loan and my PMI went buhbye after I paid 20% of the value. There was never any question of this each time I asked my local bank.

I refinanced down to 3.25 and my home appraised higher and got me out of PMI and a lower rate. I was only in the house for about 2 years before I refinanced and it was well worth it bringing our payment down a few $100 a month

I think it has changed in recent years.

We only put the minimum down to get the house financed. We have and are doing a lot of work to the house. Not sure what it would appraise for now.

How would that work in a refi situation. From what I have seen at work, the home typically appraises for something close to loan value.

[SVT Lurch]

I had an FHA loan and my PMI went buhbye after I paid 20% of the value. There was never any question of this each time I asked my local bank.

You can request it be removed at 20% equity. It will automatically come off at 22% (unless it's a recent FHA loan, as Adam mentioned).

PMI is for the life of the loan with an FHA loan correct? To ditch it we would have to refi with 20% down or pay it down to 78% of original loan value then refi? I have been curious about that since we closed on our house.

What Adam said, except that to be 100% accurate - PMI is "private mortgage insurance" on a conventional loan. FHA just has "mortgage insurance". FHA MI can be for the life of the loan, PMI on a conventional loan should always be removable. If you refinance, as long as the new loan amount is 80% or less than the appraised value, you would not need mortgage insurance on the new loan.

I think it has changed in recent years.

We only put the minimum down to get the house financed. We have and are doing a lot of work to the house. Not sure what it would appraise for now.

How would that work in a refi situation. From what I have seen at work, the home typically appraises for something close to loan value.

Most new homes seem to appraise for right around the sales price.

The only way to know for sure on an existing house is to have an appraisal done, but unless you've added livable square footage, it's unlikely updates (flooring, countertops, bathroom remodel, etc.) will have added a substantial amount of value (in an appraiser's eyes).