Deletion of PMI

[yankebabie]

Thought I read somewhere on here that there is a new law going into effect where you can no longer delete your PMI at the 20 percent mark and that the PMI stays on your mortgage for the life of the loan. We are in the middle of a re-fi and will be starting a new mortgage so I need to know if this is true. Anyone know about this and if its true when does it go into effect?

 

[Couchy]

April 1st

 

[msmayor]

Well, considering the way the rules changed back in the late 90's that made it easier to remove PMI, I'm surprised that there is anything out there that changes that.

I thought the rule changes in 2012 affected only the 'rate' used to determine the PMI amounts...I know of nothing out there that says once you have PMI you have it forever.

You still need to establish a LTV ratio that is acceptable to have PMI eliminated.

 

[gusdmh]

I read that 2013 is the last year to claim PMI as a deductible. Everything else (deletion) is still the same. It all depends on the LTV ratio.

 

[TiffJ]

This will only be applicable to FHA loans. On loans where case numbers were issued after June 1st the monthly MI will be for the life of the loan. On conventional loans, you will still be able to drop it.

 

[Jenny3]

This will only be applicable to FHA loans. On loans where case numbers were issued after June 1st the monthly MI will be for the life of the loan. On conventional loans, you will still be able to drop it.

Yes, just for FHA loans. I believe the date is April 1st though (unless things changed again..?).

 

[yankebabie]

Oh, ok. So that would really only apply to new FHA loans? I am in the middle of a HARP re-fi with B of A. I am about $3000 short of my 20% equity so will probably need PMI for only six months or so. So the PMI for the life of the loan requirement should not affect me? is that correct

 

[ICF]

To be sure, why dont you just ask the person you're working with on the refi?? They should know the current rules and how they work with your type of loan.

 

[DisneyBill]

Just a thought, but are you sure you can't come up with that 3k somewhere prior to closing? Because the PMI percentage is charged on the entire mortgage amount, and that .5 to 1.5% of the mortgage amount adds up to real dollars quick. Better off borrowing against a car or other asset even at a much higher APR and paying that back with the PMI savings. If your loan ratios, etc. will allow for. Lot depends on how much mortgage you're taking and what the PMI percentage actually is.

 

[mistysue]

Before I completely panic and flip out- if I just closed on my refinance this last week, I wouldn't be included in some new law meaning I pay PMI forever, right?

The guy who did my appraisal completely screwed me over, so I am financed at 94% or something. When I say screwed me over It's not that I wanted a higher value, my house has been completely renovated and ALL of my comps are ~$12-15/foot higher than my house and are recent sales, plus my house has deeded lake access and a larger lot. They would only let me contest using other comps but he used all of the recent local sales.
Before this refinance I got out of my old PMI about 4 years ago, I just refinanced, paid $3,000 out of pocket and have the same payment until the PMI comes off. My original closing date was for April 1 and this was never mentioned.

ETA: Googling is making me think I am safe, but no direct answers. It does look like as of June this year EVERY FHA mortgage will pay some amount of PMI for at least 11 years. Even if you are only financing 50%! It will be a lower rate, but is basically the response to the number of people who foreclosed.