San Diego Housing Bubble News and Analysis

Sorry to say it, but the bank is doing the right thing. That's what PMI is for -- to safeguard the collateral based on loan to value ratio.

PMI has nothing to do with how long you've made payments on time.

A few months back there was talk in congress about making PMI tax-deductible. Anyone know if that ever went anywhere?

Personally I'm not in favor of it, but maybe it'll help you some. Smells too much of government subsidizing lenders to me.

PMI is now tax deductible, up to an income limit of 100K (above 100K the deductible phases out, and is gone by 110K joint earnings). It is only effective currently for PMI from 2007 to 2010 (in other words, if you bought in 2005, PMI is not deductible unless you refi).

Isnt PMI based on the current account balance? Once you hit below 78% original LTV you should be good regardless of current equity.

http://www.privatemi.com/loanoptions/ben...

http://www.privatemi.com/loanoptions/ben...

"Under federal law, PrivateMI on most loans originated on or after July 29, 1999, will terminate automatically once the mortgage has amortized to 78 percent of the original value of the house. The borrower must be current on all mortgage payments. The lender must tell the borrower at closing when the mortgage will hit that 78 percent mark. Nine out of ten borrowers cancel their PrivateMI within 60 months."

Since you took out the loan 2 years ago with less than 20% equity, and prices have decline since then, your absolute best option is A) to request to have it removed when you hit 8o% of the original LTV , noted in the link from IONEGARM above. For example, if it is a 30-year fixed at 90% LTV then it would would take 7-10 years to reach this point if paying no additional principal.

Option B) ... If you have other assets or cash you could consider paying it down to about 80% of the home's current value and refinancing. This would likely require a pile of cash, which you may not have because you chose a less than 20% down in the first place. The only reason I would choose plan B is if the rate on your loan is significantly higher than today's rates.

here's an idea. Fork over the $325 for the appraisal. If the house value is significantly lower than the loan, threaten to walk. They may actually reduce the loan or interest to the point where it offsets the PMI.
the other option is to buy another house then let the current one goes to foreclosure.

If your house is in so cal, no matter if you, countrywide or daffy duck chooses the appraiser, the value will not have risen. Even if you pay it down to 80% of the original loan the liklihood that it wont still be underwater isn't good and you will have a fight on your hands to get rid of the pmi, check into the details of that law, I'll bet there is a clause for value loss unless the lawmakers were drinking the kool aid. How far off were you? did you put 15% down? 10%, 5%, 0%, if it was 15% it may be worth your while to look into your options, if it was 0%, get used to the PMI.

Yeah, forget it. You are stuck with the pmi for a few more years. Just deduct it off the taxes, and have a beer.