Ready to Refinance

Seeking Advice
1

Looking for some advice and here are the key items at play.

  • I am paying mortgage insurance
    • I forget why, but it was part of my original loan.
  • The time for that has expired
  • But I guess I have to refinance to lose the insurance payment, which i think is a crime.
    • why not just stop charging me that now that the time period has expired.
  • My credit is now over 800 and I want to see about reducing my mortgage payment.
  • However the credit rate I had I believe was at 3% from around 2022.

Things I’m curious about:

  • If interest rates are higher now, does it make the refinancing a moot point.

Any recommendations of what makes the most sense for me or things that I did not share.

2

Private mortgage insurance (PMI) is related to down payment amount, not credit score. For a conventional home loan, you need a down payment of at least 20% to avoid PMI. The issue now isn’t about your credit score (though 800+ is impressive, good job!) Instead, it is about how much your home is worth now and how much is still owed on the loan.

3

Depending on when you got your mortgage loan, if it was an FHA? Now it’s lifetime PMI insurance unless you put down at least twenty percent. Although it is called something different than PMI when it’s an FHA loan. If that’s the case, that would be why you would need to refinance to a conventional loan. I have no idea if that is the reason.

4

@Fynn
PMI is not lifetime with the loan. When LTV reaches 78 percent, it can be removed.

5

Drew said:
@Fynn
PMI is not lifetime with the loan. When LTV reaches 78 percent, it can be removed.

I believe Meg is correct, PMI is permanent with an FHA. I got the bank to remove mine easily, only because I have a conventional loan.

6

Drew said:
@Fynn
PMI is not lifetime with the loan. When LTV reaches 78 percent, it can be removed.

It is with FHA loans. Idk what year it started but it’s been a while.

7

Fynn said:

Drew said:
@Fynn
PMI is not lifetime with the loan. When LTV reaches 78 percent, it can be removed.

It is with FHA loans. Idk what year it started but it’s been a while.

Ahh, gotcha. Thanks

8

Fynn said:

Drew said:
@Fynn
PMI is not lifetime with the loan. When LTV reaches 78 percent, it can be removed.

It is with FHA loans. Idk what year it started but it’s been a while.

It’s called Upfront PMI. It’s separate from paying PMI.

9

@Rin
No that is something different. It’s called MIP. That is the monthly insurance amount you have to pay for life with a FHA loan. The upfront PMI is just a one-time payment you have to make at closing. Edit: PMI and MIP although called different things are both payments made to protect the lender.

10

@Fynn
Correct - 10% Down Payment on FHA to have it drop off in 11 years otherwise it’s on for the life of the loan.

11

Teo said:
@Fynn
Correct - 10% Down Payment on FHA to have it drop off in 11 years otherwise it’s on for the life of the loan.

I’m not even sure if they offer that anymore. But I’m not positive. But I know recently, my friend’s agent told her that.

12

@Fynn
HUD’s website still has it at 10%.

13

What exactly has expired??

If you’re referring to PMI then you should contact your lender to see if you can remove PMI and if so what are the steps. You will need to reach a certain % to remove PMI which usually takes more than 2 years of regular mortgage payments to reach.