Did P&I insurance requirements really drop this year?

[46Tbird]

That's right, 20%, I suppose I was being optimistic for myself. It's all a money grab anyway, is paying a few hundred dollars more a month really going to ensure that I don't default on my loan? I'd really like to know the logic behind it, beyond being an excuse to make more money.

Ask an actuary.

[aggie97]

If you bought the house for a good price and the market value has gone up enough that you feel you would have over 20% equity now, contact your lender to discuss your options. They will require a new appraisal by THEIR appraiser to show the new equity level. However, they make money on the PMI requirement and you may have to bluff that you are considering re-financing with another lender. You are going to shop re-fi's anyway which are going to require the new appraisal so might as well pit the lenders against each other.

If you aren't 100% sure you have the 20% equity, re-fi might help you but pay strict attention to the costs of doing so. If you are just trying to lower your monthly payment to free up disposable income, paying a small fortune to re-fi isn't worth it. Just look at all the numbers.

[GeorgeG.]

Though PMI is required by lenders When putting less than 20% down, the lender has to purchase that PMI through third parties. My sister sells PMI to lenders.

I thought PMI was required by lenders regarding of % down, when going FHA. No?

[03mustangdude]

too bad you are required to have mip now which blows. I pay 400 or so a year for nothing.

[Ruffdaddy]

too bad you are required to have mip now which blows. I pay 400 or so a year for nothing.

Go conventional...

[juiceweezl]

Though PMI is required by lenders When putting less than 20% down, the lender has to purchase that PMI through third parties. My sister sells PMI to lenders.

We are definitely getting older and mellower. I can remember when the next post after this would have been, "Pics of sister." You guys suck! I know it's Brent, but damn!

[SVT Lurch]

P&I = principal and interest

PMI = private mortgage insurance on a conventional loan (factors vary based on the scenario - primarily credit score and loan-to-value).

Mortgage Insurance is required on all FHA loans (again, the factors vary based on the scenario). These factors were recently lowered.

PMI and MI are exactly that - insurance for the mortgage. In the event you default on the loan and the lender has to foreclose, the entity providing the insurance will pay the lender a specific percentage, based on the policy, to help offset losses incurred while foreclosing on the property. The insurance is provided through a third party, the banks/lenders do not make any money off of mortgage insurance. It's simply protecting the lender's money that you're borrowing to purchase your house. If you don't like it and don't want to pay it - put 20% or more down when you purchase a house. The good news is that (as far as I know) it's still deductible, just like the mortgage interest, so you're essentially just paying a higher effective rate.

[GE]

PMI? What's that?