Posted on: 10th Jun, 2010 04:35 pm
I am starting therefi process and my mortgage guy stated that since my house is worht lesss than 262k, id have to pay PMI on a 5/1. I want a 5/1 as I dont plan on staying in this house forever, but dont want to pay PMI. Isthis a normal part of a 5/1?
hi shoga!
welcome to forums!
in most cases, if you do not have equity in your property, then you won't be able to get a refinance. your lender is making an exception and has, thus, requested you to go for a pmi in order to secure the loan. unless you go for a pmi, i don't think the lender will consider your request for a refinance.
feel free to ask if you've further queries.
sussane
welcome to forums!
in most cases, if you do not have equity in your property, then you won't be able to get a refinance. your lender is making an exception and has, thus, requested you to go for a pmi in order to secure the loan. unless you go for a pmi, i don't think the lender will consider your request for a refinance.
feel free to ask if you've further queries.
sussane
Ok, that makes sense. Is it normal to have PMI on a 5/1 ARM, but not a 30 year mortgage? If I choose the 30 year, he said theres no PMI. And
i should point out, that my mortgage company contacted me out of the blue asking me if I wanted refinance. I had no plans to do so, but the rates and no closing costs are attractive. But PMI isnt!
i should point out, that my mortgage company contacted me out of the blue asking me if I wanted refinance. I had no plans to do so, but the rates and no closing costs are attractive. But PMI isnt!
It is possible that your existing 30 year fixed mortgage does not have PMI and is owned by Fannie Mae or Freddie Mac. There are special refinance guidelines to allow borrowers to refinance to a lower rate even if their house values dropped and because of the decreased value, PMI would normally be necessary. If no PMI before, no PMI now.
It might be that under those guidelines going from 30 fixed to 5/1 ARM is not permitted and therefore PMI would be required. I do not know for certain that no one can go from 30 fix to 5/1 ARM. I would have to check that out further. The guidelines are that you can go to a less risky loan than the one you have now. Going from 30 fixed to an ARM may be considered going to a riskier type loan and not eligible for the program.
It might be that under those guidelines going from 30 fixed to 5/1 ARM is not permitted and therefore PMI would be required. I do not know for certain that no one can go from 30 fix to 5/1 ARM. I would have to check that out further. The guidelines are that you can go to a less risky loan than the one you have now. Going from 30 fixed to an ARM may be considered going to a riskier type loan and not eligible for the program.
Hi,
my mortgage is payable to sovereign. the broker said that the PMI would continue until i had paid off 80% of the value of the house. My original mortgage was 80% oplus a piggyback mortgage of 5% to avoid the PMI as i put down 15 %. I have paid the 2nd loan off, so only have the 80% one. I'm just not sure if I should take a 5/1 ARM that requires PMI and not clear why there is PMI on it.
my mortgage is payable to sovereign. the broker said that the PMI would continue until i had paid off 80% of the value of the house. My original mortgage was 80% oplus a piggyback mortgage of 5% to avoid the PMI as i put down 15 %. I have paid the 2nd loan off, so only have the 80% one. I'm just not sure if I should take a 5/1 ARM that requires PMI and not clear why there is PMI on it.
Same answer I gave above.
Your current first mortgage is either owned by Fannie Mae or Freddie Mac, or, it is not.
If it is, you do not need PMI to do another 30 year fixed mortgage.
If it is, to do other than a fixed mortgage may require PMI if the ARM is not eligible for the special refinance programs. It might be, but, might not be. Based on what the loan officer is telling you, it appears the first mortgage you have now is owned by Fannie Mae or Freddie Mac, but, the special refinance proghram does not permit refinancing from a fixed mortgage to an ARM
Your current first mortgage is either owned by Fannie Mae or Freddie Mac, or, it is not.
If it is, you do not need PMI to do another 30 year fixed mortgage.
If it is, to do other than a fixed mortgage may require PMI if the ARM is not eligible for the special refinance programs. It might be, but, might not be. Based on what the loan officer is telling you, it appears the first mortgage you have now is owned by Fannie Mae or Freddie Mac, but, the special refinance proghram does not permit refinancing from a fixed mortgage to an ARM