Home refi and ditching PMI

[black2002ls]

We bought our home in May 2014, we are coming up on 2 years and I want to try and get out from under the PMI. We have made significant improvements to the home, though I'm not sure if interior remodel will affect an appraisal much. The house behind us sold for 10-15k more than we paid for our home, and there is another one down the street for sale for 25k more than we paid for ours. Both are smaller with similar or smaller lot sizes. I'm hoping those comps help bump my value.

What all is involved and how soon can we refi to get rid of PMI? Should I have an appraisal done to see if it is even a possibility?

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[juiceweezl]

Figure out what your home would appraise for and compare to LTV percent. If below 80, then refi. You should be able to do a no cost refi as well.

[slow99]

I just looked at this last summer and posted this in couple threads here. For our lender, you just pay $250-ish for the appraiser to come out and appraise your home. From years 2-5, you have to appraise with 25% equity in your home and they just drop the PMI. After 5 years, same process, but you have to appraise with 20% and they drop the PMI. You don't have to refi, just pay the appraiser fee and see if it appraises with enough equity to drop the PMI.

[CWO]

SVT Lurch

[03mustangdude]

I just looked at this last summer and posted this in couple threads here. For our lender, you just pay $250-ish for the appraiser to come out and appraise your home. From years 2-5, you have to appraise with 25% equity in your home and they just drop the PMI. After 5 years, same process, but you have to appraise with 20% and they drop the PMI. You don't have to refi, just pay the appraiser fee and see if it appraises with enough equity to drop the PMI.

is that every lender? My loan just got moved to pennymac wondering if they do the same thing

[David]

Don't some loans also require you to have PMI for atleast 5 years regardless of amount of equity in the property? FHA loans maybe?

[black2002ls]

I just looked at this last summer and posted this in couple threads here. For our lender, you just pay $250-ish for the appraiser to come out and appraise your home. From years 2-5, you have to appraise with 25% equity in your home and they just drop the PMI. After 5 years, same process, but you have to appraise with 20% and they drop the PMI. You don't have to refi, just pay the appraiser fee and see if it appraises with enough equity to drop the PMI.

Don't some loans also require you to have PMI for atleast 5 years regardless of amount of equity in the property? FHA loans maybe?

I forgot to mention that it is an FHA loan. IIRC there was a cut off dat efor neing able to eliminate PMI. We purchased after that date so we will have PMI over the life of the loan unless we refi to a conventional loan.

No cost refi would be preferrable if it was an option.

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[slow99]

I forgot to mention that it is an FHA loan

Disregard my post; mine is not an FHA loan.

[03mustangdude]

Freaking fha lol should be paid off in 3 years

[akfodysvn]

I refinanced at 3 years in. I only had to be at 20%. I bought in 2010, made zero improvements and my value increased 7%. I got out of pmi and my rate went down by 1%. My savings was around $150 month. The cost of the refi paid for itself in under 2 yrs.

I made nice with the appraiser and before he walked out asked what value I needed. My appraisal came back at that exact value which from an outside perspective would look sketchy. Regardless it was a great decision and now I have that low rate on the home which has been converted to a rental property.

Talk with some real estate, lender and appraisal friends if you have any in your area

[AdamLX]

Have a realtor friend do a market analysis on your home first. That will get you your best assessment of value without having to spend any cash.

The only way you're getting out of FHA PMI is a refi to a conventional loan. Now you have to compare your rate to today's rates along with the cost involved to refinance. Your magic number is 80% LTV because you are refinancing.

[Broncojohnny]

The appraisal business is sketchy as fuck right now. Like as bad as it ever was before things blew up. I can get a commercial appraisal in less than ten days.

[mustang1200]

SVT Lurch

This. He will answer your questions with facts.

[Chili]

SVT Lurch will certainly be able to answer your refi questions, and is a pretty sexy dude.. You might want to give your mortgage company a call too, to see what options you may have with them.

[Big A]

I forgot to mention that it is an FHA loan. IIRC there was a cut off dat efor neing able to eliminate PMI. We purchased after that date so we will have PMI over the life of the loan unless we refi to a conventional loan.

No cost refi would be preferrable if it was an option.

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As mentioned, you will have to refinance on a new conventional loan to get rid of PMI, as FHA requires it through the whole term of the mortgage. Being that this is all brand-new paperwork, there will be a cost associated with it, either up front, or baked into your rate. No cost refi would be better called hidden cost refi, nothing's free in the real estate game.