Should I refi now-or wait a while longer?

[moneymaker]

I want to get out from under the PMI, so I’m going to refinance again, I feel like flu. Now will it matter as far as rates whether I have 75% or 80% LTV?

[all]

I believe 75% is still the number you have to hit in order to qualify for the best rate.

Call Sheldon, he might not have the best rates but he can tell you what the current requirements are.

[gzz]

I think 75% is what you need to get the lowest cash out rate. Otherwise 80% works.

Getting rid of MI due to equity hitting 20% is a huge hassle, a refi is simpler.

And you should do so now, rates just dipped and you never know when standards, your income, or rates will change against you.

[moneymaker]

Thanks for the feedback gzz, already started the process with current lender, they said no fees and they will pay for the appraisal.

[paramount]

Mm, do you have to pay the appraisal up front and then they credit back at closing?

I’ve been considering prospect mortgage located in pb, with them I pay up front and then get a credit back.

[moneymaker]

No ,according to them, they pay. I will let you know as it progresses however, I figure if I can get a payment on a 15 year mortgage that is the same or lower than what Zillow says the rent should be then I will be happy.

[paramount]

Are you comfortable sharing the name of the company, and if so please do…

[moneymaker]

I don’t think they are giving me the best rate but it is a little lower than I’m currently paying. I’ve also caught them misquoting rates so I’d rather not recommend them until it’s a done deal.

[moneymaker]

Still waiting on the appraisal! I have a feeling they are not really motivated to save me money. Everything is going to be based on appraisal. If it doesn’t appraise high enough to get rid of the PMI, then I’ll wait a bit longer.

[HLS]

Your current ‘lender’ probably doesn’t own your loan, they just service it.
An old loan gets paid off and a refi is an entirely new loan that will be sold into a new mortgage backed security.
You usually do not get the best rate by staying with your current servicer and they cannot overlook any guidelines because of your current loan status.
It’s usually incorrect to think that you get any preferential treatment.
Qualifying is crazier than ever. If you can save .25% or more on a reasonable loan amount and it is at zero cost (or zero + a credit) there is no reason not to refi.
Realize that PMI is almost a complete waste of money and may not be tax deductible depending on your income.
If you can bring cash in to eliminate PMI it is a huge return on the investment.
If you don’t/can’t refi, at 78% of the original appraised value, PMI should be removed without a fight.
At 80% it can a bit tricky to get it removed.
*HLS

[moneymaker]

Thanks for the reply HLS. Isn’t the 78% rule for FHA loans, are there any rules for banks? They are asking for 75% LTV on the original loan to remove PMI, don’t remember that upon closing. Still waiting on appraisal!

[gzz]

I used boxhomeloans.com for refi and got a lower rate than any local bank I saw. They did a pretty good job but are known for not overlooking even tiny deviances from the giant Fannie Mae guidelines book, so they work best with properties in good condition and buyers with w2 income. They were also pretty fast.

[HLS]

Bank probably does not own your loan.

FHA has MMI (Mutual mortgage insurance)
Fannie/Freddie use 3rd party companies for PMI (Private Mortgage Insurance)

In most cases banks DO NOT own loans nor do they loan their money for 15yrs or 30yrs. They are the servicer of loans. They collect payments etc.

Banks may make their own rules but cannot ignore certain things. Banks originate loans just like mortgage brokers. In most cases 15yr/30yr loans are sold off to FNMA/FREDDIE who then bundle them into mortgage backed securities (MBS) and sold in the bond market.

At 80% LTV based on the value at the time the loan was originated, you have to fight to get MMI or PMI removed. At 78% it should be removed automatically.

There are loan programs for some that allow you to refi with less than 20% equity that don’t require mortgage insurance, but if you currently have mortgage insurance you cannot eliminate it if you don’t have at least 20% equity.

[NotCranky]

To the op did you try to get PMI removed from your current loan?
I did that once a long time ago, just a few months after buying the house too.

[SD Transplant]

I would call Sheldon “HLS” with your refi questions. He has a great track records on this site, but there may be other local brokers to consider.

Disclosure: I just refi’ed my original loan from a big bank and got rid of mortgage insurance + saved a few $ due to a better rate. Sheldon’s team was great.

[Author]

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