Quicken Loans PMI advantage

[wendow]

Anyone familiar with this program? We are considering a refi and I keep hearing radio ads for this Quicken loan program which says they remove PMI. I know the interest rate is slightly higher but just wondering if that may be a better deal than paying PMI. Our PMI is a little over $200 a month. Any thoughts?

 

[maria's_mommy]

Don't know about that, but if anyone in your family is/was military check out USAA. My FIL was so we qualify so they are pretty relaxed about qualifying. We went from $160 PMI to $52 when we ref with them and they have good rates.

 

[barkley]

take a look at bankrate's article on this (lender paid mortgage insurance pros and cons) to get a good understanding on how this type of program works.

the issue I see with it is w/traditional pmi you stop paying it once your home value/loan reaches a certain level (some lenders drop it with proof via a current appraisal), but with lender based it's written into the life of the loan so unless you want to go through the expense of refinancing down the line (so figure that into any projected 'savings') there may be short term savings but in the long term a higher cost.

bankrate's article gives 2 identical examples, and in that case while there was about a total of a $3000 savings over 10 years, but long term (w/a traditional 30 year loan) it ends up costing about $5000 MORE.

just for the heck of it I just looked at quicken's rates-and they are running for the traditional program WELL over a quarter of a percent higher than our local credit unions. my understanding is these pmi elimination programs run on average another quarter percent ABOVE their standard rates, so you might want to run the numbers to see if a traditional re-fi through a local credit union wouldn't net you the same savings short term AND put you in a loan that once you are exempt from pmi won't cost more than a new appraisal to dump it (also compare costs for quicken loans vs. credit unions-in our experience the credit unions cost is MUCH lower).

 

[bluedoggy]

Having been in the real estate industry for over 30 years, I would recommend that you contact a local lender BEFORE you would go through Quicken loans (or some of the other "on-line" lenders. You most likely can get as good (or better) financing options.
I always want to be able to meet with my lender face-to-face, so if there are any questions or issues, I can address them directly, rather than over the phone or internet.

 

[john398]

for me, I can deduct PMI on my income taxes, atleast it still let me for 2014, so I do not mind paying it

 

[artemis4]

Having been in the real estate industry for over 30 years, I would recommend that you contact a local lender BEFORE you would go through Quicken loans (or some of the other "on-line" lenders. You most likely can get as good (or better) financing options.
I always want to be able to meet with my lender face-to-face, so if there are any questions or issues, I can address them directly, rather than over the phone or internet.

This! Local lenders are the best way to go.

Know your loan to value ratio so that you know approximately how long before you would stop paying PMI if you have mortgage with the local lender. Determine the actual cost of both loans based upon your estimated repayment timeframe. You will have to do some homework to find what is truly the best financial choice. Once you have all the data, you can make an educated decision.

Honestly, I'll be surprised if this program come out as saving you money over a local lender in the long run.

 

[supersnoop]

for me, I can deduct PMI on my income taxes, atleast it still let me for 2014, so I do not mind paying it

Paying $1 to save $0.25 isn't really the best rate of return.

 

[john398]

Paying $1 to save $0.25 isn't really the best rate of return.

thanks for the information, I did not realize it was that bad, but I just reviewed and guess what, its only a $450 savings on a $1783 fee so thanks for making me rethink that, sorry for the bad advise

 

[mistysue]

I don't know if this effects you but depending on how much equity you have at the time of financing, something passed in the summer of 2013 so that many purchasers are required to pay PMI for the life of the loan not just until their equity builds up. If your value has dropped or if you are one of those people I would not touch refinancing until you are over 20% equity. How much are they going to charge you to do the refinance? You could pay that few thousand dollars directly to your mortgage and drop the PMI sooner leaving you with the lower interest rate.

 

[wendow]

Thank you all for your advice. It helps just to give me some more things to think about and research.

We are not military so no USAA for us.

We plan to be in this home for 7-10 years, maybe less.

We closed in July 2013 and I do not believe we have to pay PMI for the life of the loan but I need to look back at our closing documents.

I read something about how PMI was no longer tax deductible which makes the PMI advantage program even more attractive since all interest is deductible.

Are there any local lenders who do these types of programs? I've just never heard of it.

 

[john398]

Thank you all for your advice. It helps just to give me some more things to think about and research.

We are not military so no USAA for us.

We plan to be in this home for 7-10 years, maybe less.

We closed in July 2013 and I do not believe we have to pay PMI for the life of the loan but I need to look back at our closing documents.

I read something about how PMI was no longer tax deductible which makes the PMI advantage program even more attractive since all interest is deductible.

Are there any local lenders who do these types of programs? I've just never heard of it.

they actually extended the tax deduction another 2 years thru 2015

Is yours FHA? I belive FHA requires you have it 5 years unless you refinance

 

[wendow]

they actually extended the tax deduction another 2 years thru 2015

Is yours FHA? I belive FHA requires you have it 5 years unless you refinance

Good to know we can deduct the PMI still.

Not an FHA loan.