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  1. #1
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    Do PMI payments decrease over time?

    My understanding is the PMI percentage rate is calculated based on (among other things) the loan to value ratio, but as you gain equity does the PMI payment decrease* or is it just based on the initial loan to value ratio?

    (exciting thread, I know)


    *because you are decreasing the loan principle and, in most cases, your home value is increasing with time.
    I don't got time for pain. The only pain I got time for is the pain I put on fools who don't know what time it is. -Terry Tate

  2. #2
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    Quote Originally Posted by jjdche
    My understanding is the PMI percentage rate is calculated based on (among other things) the loan to value ratio, but as you gain equity does the PMI payment decrease* or is it just based on the initial loan to value ratio?

    (exciting thread, I know)


    *because you are decreasing the loan principle and, in most cases, your home value is increasing with time.
    We looked inot this a few months ago. Its my understanding that the monthy PMI payment stays the same, but the appreciation of your home can be factored into getting the PMI removed completely. Im sure it varies from lender to lender, but we had to have what we owe be less than 75% ( i think) of the appraised value of our home AND have lived here for at least 5 years

  3. #3
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    Fairfax, VA
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    Quote Originally Posted by jjdche
    My understanding is the PMI percentage rate is calculated based on (among other things) the loan to value ratio, but as you gain equity does the PMI payment decrease* or is it just based on the initial loan to value ratio?

    (exciting thread, I know)


    *because you are decreasing the loan principle and, in most cases, your home value is increasing with time.
    Depends on the loan. Most PMI payments stay the same as far as I know. FHA PMI payments can never be canceled until you sell the house or refi. In conventional loans you can cancel the PMI one your LTV hits 75% to 80%. Depends on the lender. I'm an appraiser/realtor and do appraisals for PMI removal all the time.

  4. #4
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    That five year rule is such gargbage. Filthy scum-sucking money stealers.

  5. #5
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    Quote Originally Posted by Rasta
    Depends on the loan. Most PMI payments stay the same as far as I know. FHA PMI payments can never be canceled until you sell the house or refi. In conventional loans you can cancel the PMI one your LTV hits 75% to 80%. Depends on the lender. I'm an appraiser/realtor and do appraisals for PMI removal all the time.

    Nice. You gonna be in SC anytime soon?

  6. #6
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    Quote Originally Posted by southcarolina
    Nice. You gonna be in SC anytime soon?
    Sorry SC, only licensed in Virginia.

    When you do need an appraiser, try and get one that has the SRA designation with the Appraisal Institute. They typically are the best out there because of the experience and training they have had to complete.

  7. #7
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    Quote Originally Posted by jimpet
    That five year rule is such gargbage. Filthy scum-sucking money stealers.

    Yeah, PMI is garbage period. I'd like someone to explain to me how the mortgage companies are losing money if you default.
    I don't got time for pain. The only pain I got time for is the pain I put on fools who don't know what time it is. -Terry Tate

  8. #8
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    Quote Originally Posted by jjdche
    Yeah, PMI is garbage period. I'd like someone to explain to me how the mortgage companies are losing money if you default.
    Well it is true that mortgage companies generally only recoup 80% of the actual value of a home they foreclose on (at least that's what I hear is typical). So I understand the desire to want to be covered if your equity is below 20%. But it's highway robbery once the home has appreciated to the point where you have 20% or more in equity in the place, to continue to make people pay the PMI. The last place I owned, I was at about 35% equity, but couldn't get it dropped because I hadn't been paying it for five years. I can imagine, given the way the market went over the past 5 years, that some people were legimately at 50% equity and were still paying PMI.

  9. #9
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    Quote Originally Posted by jjdche
    Yeah, PMI is garbage period. I'd like someone to explain to me how the mortgage companies are losing money if you default.
    I agree that PMI companies are ridiculous in many ways but we are seeing values come down in the DC metro area after ridiculous increases in value that were not sustainable. Mortgage companies are actually having to foreclose on people who bought houses with 95% and 100% LTV's. They bought their houses at the peak of the market and the values of the house are now under what they paid for them. The mortgage company can lose some serious cash in these situations especially if they have to sell the house and pay realtor fees or they can't sell it because of a slow market. I see it every day unfortunately.

  10. #10
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    Quote Originally Posted by Rasta
    Sorry SC, only licensed in Virginia.

    When you do need an appraiser, try and get one that has the SRA designation with the Appraisal Institute. They typically are the best out there because of the experience and training they have had to complete.
    Ok....sound good.

    Do you take into account the "lived in factor" when determning a price? In other words, would it matter one way or the other if we repainted inside and stuff like that?

    Sorry to bore you with work questions, but we are seriously trying to get ours removed, and i think we are borderline on 75% and dont want to waste the appraisal fee if we dont at least think we have a decent shot. In a related issue, how bribable are home appraisers?


    I kid i kid.


    Maybe.


    No really im kidding.

    *puts $100 on the table and turns away, not looking or anything at the $100 dollars just sitting there to be taken*


    ;)

  11. #11
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    Quote Originally Posted by jjdche
    Yeah, PMI is garbage period. I'd like someone to explain to me how the mortgage companies are losing money if you default.
    Because of the fees involved in selling the home and that it often just goes up in an auction, banks rarely get the full value of the home in a foreclosure sale. Since people w/ a lot of equity have more options if the payments are tight or too much, the foreclosures are usually only the ones where the mortgage is close to the value of the home.

    There are ways around PMI though. For our new home that we're closing on 07/28, we took out a combo loan (5% down, 80% financed first mortage, w/ 15% second mortgage) so we don't have PMI on either loan. Of course, we had to take a slightly higher interest payment on the second loan, but we still come out ahead in the actual money paid out...

  12. #12
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    Quote Originally Posted by southcarolina
    Ok....sound good.

    Do you take into account the "lived in factor" when determning a price? In other words, would it matter one way or the other if we repainted inside and stuff like that?

    Sorry to bore you with work questions, but we are seriously trying to get ours removed, and i think we are borderline on 75% and dont want to waste the appraisal fee if we dont at least think we have a decent shot. In a related issue, how bribable are home appraisers?


    I kid i kid.


    Maybe.


    No really im kidding.

    *puts $100 on the table and turns away, not looking or anything at the $100 dollars just sitting there to be taken*


    ;)
    I have to run right now but I'll answer your question when I get back later today.

  13. #13
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    Quote Originally Posted by Rasta
    I have to run right now but I'll answer your question when I get back later today.

    OK.


    *looks at the empty table*



    I understand completely.

  14. #14
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    Mount Airy, MD
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    Quote Originally Posted by southcarolina
    Ok....sound good.

    Do you take into account the "lived in factor" when determning a price? In other words, would it matter one way or the other if we repainted inside and stuff like that?

    Sorry to bore you with work questions, but we are seriously trying to get ours removed, and i think we are borderline on 75% and dont want to waste the appraisal fee if we dont at least think we have a decent shot. In a related issue, how bribable are home appraisers?


    I kid i kid.


    Maybe.


    No really im kidding.

    *puts $100 on the table and turns away, not looking or anything at the $100 dollars just sitting there to be taken*


    ;)
    I'll let my friend Rasta give the pro's reponse but IMO you are getting your house appraised, not trying to sell it. Cosmetic stuff like painting etc won't play into it. Go to Realtor.com and look for comps, this is the best way to get a good handle on your home value. Getting rid of the PMI was huge for us.

    Good luck.
    6 Footers For Bogey Really Suck

  15. #15
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    Quote Originally Posted by Davekn
    I'll let my friend Rasta give the pro's reponse but IMO you are getting your house appraised, not trying to sell it. Cosmetic stuff like painting etc won't play into it. Go to Realtor.com and look for comps, this is the best way to get a good handle on your home value. Getting rid of the PMI was huge for us.

    Good luck.

    yeah weve done that....comparable houses in our neighborhood have been selling within a 1000 dollars either way of the amount we need to get appraised for to qualify for 75%

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