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| *Ostroff, Fair and Company>>>Renting & Real Estate |
I've been paying Mortgage Insurance for 3 years now. When can I stop? |
I have asked my lender to drop the PMI ($330 / mo!) but they refuse because I've been late on a few payments. Doesn't it make sense that if they drop the PMI I would be better able to stay current on the loan as it would cost $330 less each month? Nor can I refinance because nobody else will make a loan to me because of those late payments. I never would have been late had my payments been $330 cheaper. AND, I never would have taken the loan if the $330 monthly charge would have been disclosed to me prior to closing. Any suggestions? Your PMI (mortgage insurance) will only automatically terminate after you've reached 22% equity in your home, EXCEPT when you've had late payments within the last year. Source(s): www.ftc.gov MI is required as long as your mortgage is over 80% of your homes' current value. Once you get below 80%, contact your lender and they will remove it. PMI inssurance is required if the down payment is less than 20% of the purchase cost. If your equity in your home is @ 20% or greater, they have no right to charge this fee. An attorney may write a letter on your behalf. In some areas, home values are dropping, so even if you now have 20% value of the PURCHASE cost, the MARKET value my be different. Often times, you have to get an appraisal of your home to verify to the lender that you have exceeded the 20%. equity. Good Luck Someone should have disclosed your PMI amount when you signed your loan documents. It doesn't make sense because you signed your documents knowing full well what your payments would be. True, things do happen in life where we can get behind on payments but don't try to blame the PMI as the problem. Ask your lender if they brokered the loan to someone else. I'm sure they did, so you will be out of luck with any help from them. Right now I would work on paying my mortgage on time so down the road you won't have trouble with liens or messing up your credit further. 16 yrs real estate / Loan document Signer PMI is insurance to protect lenders when a borrower puts less than 20% down. PMI is the vehicle that allowed you to buy your home. I'm sure you can sacrifice something else in your life that will ensure you make your full payments on time. Why would the lender drop the insurance that covers them, while you are proving to the lender that you are a risk? Make your payments on time, which will also bring your credit scores up. After you've made 6 months on time, go back to your lender and request it be dropped OR refinance with another company. Prove yourself, and then you will have options... |
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