Posted on: 19th Sep, 2007 06:26 pm
My client wants to pre-pay his PMI. The loan broker is saying he can't. Is that true or can you always pre-pay the PMI? The loan is "My Community" Bank of America. Thanks
Hi,
Welcome to the forum.
No, the loan broker is not saying the truth as PMI premiums can be prepaid. But it makes no sense to prepay PMI as PMI fees are not tax deductible. Moreover, the PMI payments are amortized over the entire life of the loan. So, I would advice you not to do this.
Welcome to the forum.
No, the loan broker is not saying the truth as PMI premiums can be prepaid. But it makes no sense to prepay PMI as PMI fees are not tax deductible. Moreover, the PMI payments are amortized over the entire life of the loan. So, I would advice you not to do this.
Hi Max,
Welcome to the forum.
PMI premiums can be prepaid but I don't know whether Bank of America allows for it.
One reason of not paying PMI (as I see) is that, you may have to sell property and pay off the mortgage prior to the end of the loan term. Then you will be losing your money on the premiums which you have prepaid. Also, the premiums are currently tax deductible for loans originated in 2007. So, if you have a loan taken out this year itself, then you will be eligible for the deductions on the monthly premiums. Thus, it is better not to prepay PMI premiums. Again, if it's a loan from Bank of America then they will be able to tell you better.
Hope this helps...
God bless you.
Samantha
Welcome to the forum.
PMI premiums can be prepaid but I don't know whether Bank of America allows for it.
One reason of not paying PMI (as I see) is that, you may have to sell property and pay off the mortgage prior to the end of the loan term. Then you will be losing your money on the premiums which you have prepaid. Also, the premiums are currently tax deductible for loans originated in 2007. So, if you have a loan taken out this year itself, then you will be eligible for the deductions on the monthly premiums. Thus, it is better not to prepay PMI premiums. Again, if it's a loan from Bank of America then they will be able to tell you better.
Hope this helps...
God bless you.
Samantha
There are programs that do allow for the prepayment of PMI......however mycommunity is not one of them. I would assume that this is a 100% loan and generally speaking the loan programs available at 100% do not allow for the pre-pay of PMI.
How much in advance is he looking to prepay?
the purchace price is 128,000 .I have 103,000 remaning to pay,when does my pmi stop ,the property is now value about 83,000 can i prepay it.
Hi sammy!
Welcome to forums!
PMI can usually be canceled after your home's value has risen enough to give you 20 to 25% equity in your house.
Feel free to ask if you've further queries.
Sussane
Welcome to forums!
PMI can usually be canceled after your home's value has risen enough to give you 20 to 25% equity in your house.
Feel free to ask if you've further queries.
Sussane
Sammy,
The PMI should go away automatically when the loan balance reaches 78% of the purchase price. The numbers you quoted are at 80.469%
If you have a conventional loan, you may not be able to get rid of PMI until you have had it a minmum of one or two years.
We can all talk about your situation, however, only correct way for you to know is to call your lender 800 telephone number and ask when your PMI can be dropped.
While on the phone, ask if you pay down the balance to 78% of the purchase price, will the PMI payment go away. You pay down the loan balance, you do not prepay the PMI.
The PMI should go away automatically when the loan balance reaches 78% of the purchase price. The numbers you quoted are at 80.469%
If you have a conventional loan, you may not be able to get rid of PMI until you have had it a minmum of one or two years.
We can all talk about your situation, however, only correct way for you to know is to call your lender 800 telephone number and ask when your PMI can be dropped.
While on the phone, ask if you pay down the balance to 78% of the purchase price, will the PMI payment go away. You pay down the loan balance, you do not prepay the PMI.
