Greetings, markp!
PMI can be a HUGE amount of your mortgage payment, so I don't blame
you for wanting to eliminate it as soon as possible.
1) Is it possible to stop paying PMI (Prepaid Mortgage Insurance)? and
how?
Answer: Yes, it is possible, but "when" and "how" depends on whether
you have regular PMI on your FHA mortgage, or whether your "PMI" is
actually FHA's special mortgage insurance. It also depends on the
original closing date of your mortgage. If your loan has special FHA
mortgage insurance and was closed prior to January 1, 2001, you may
not be able to stop the insurance payments, but you may be eligible
for a partial premium refund once your loan has been terminated.
From QwkFund.com's page on "PMI and FHA Mortgage Insurance":
"Although the insurance protection concept is similar, there are
differences between private mortgage insurance and FHA mortgage
insurance. FHA insurance is a government-administered mortgage
insurance program that does have certain restrictions... FHA insurance
lasts for the life of the loan [for loans closed before January 1,
2001], unlike private mortgage insurance which is cancelable in most
circumstances."
http://www.qwkfund.com/qf/insurance/pmifhainsurance.htm
From YourMortgageIsApproved.com:
"As you may know, private mortgage insurance or PMI is required by FHA
on their home mortgage loans. The loan requires 3% of the borrowers
own money and FHA requires PMI coverage until that loan has been held
for five years or reached an amortized value of a 78% loan to value
ratio or LTV."
http://216.239.53.100/search?q=cache:evybkZsE-yYC:www.yourmortgageisapproved.com/FHA_Mortgage_Insurance.htm+fha+pmi&hl=en&ie=UTF-8
From the U.S. Housing and Urban Development's website section
"Home > About HUD > Housing > Single Family > Buying a home":
"HUD and FHA Making Homeownership More Affordable for You:
The Homebuyer Savings Plan eliminates the annual insurance premium (on
loans closed on or after January 1, 2001) once you have paid off 22
percent of your loan. This saves you money while still providing FHA
insurance for the life of your loan."
http://www.hud.gov/offices/hsg/sfh/buying/savplan.cfm
HOWEVER:
-------
From the U.S. Housing and Urban Development's website section
"Home > About HUD > Housing > Single Family > FHA insured loans":
"FHA Refunds & Distributive Shares:
Premium Refund: You may be eligible for a refund of a portion of the
insurance premium if you:
- acquired your loan after September 1, 1983
- paid an upfront mortgage insurance premium at closing and
- did not default on your mortgage payments.
Review your settlement papers or check with your mortgage company to
determine if you paid an upfront premium."
http://www.hud.gov/offices/hsg/comp/refunds/fhafact.cfm
From the U.S. Housing and Urban Development's website section
"Home > About HUD > Housing > Single Family > FHA insured loans":
"Does HUD Owe You a Refund?
If you had a HUD/FHA insured mortgage, you may be eligible for a
refund on part of your insurance premium or a share of the earnings.
You can search the database by name or by case number."
http://www.hud.gov/offices/hsg/comp/refunds/index.cfm
2) Will Ditech.com give me a copy of the appraisal?
Answer: They might. However, they will not talk to me, because I have
not applied for refinancing through them. YOU must be the one to call
them and ask for a copy of your appraisal. They MAY be willing to give
it to you, either for free or for a nominal fee, or they may tell you
that the appraisal is their property and that they will not give you a
copy. If that is the case, you will need to arrange for an appraisal
by a HUD-approved appraiser on your own. This will cost some money,
but as you are aware, the savings it could create would be
considerably more substantial than the fee.
3) Will that [Ditech's] appraisal meet the criteria that us bank home
mortgage
wants? or do they want their own? appraisal?
Answer: If you are able to obtain a copy, Ditech's appraisal SHOULD be
acceptable to US Bank Home Mortgage and the FHA, as long as the
appraiser is HUD-approved. If the bank disagrees with the appraisal,
they will have to pay for their own appraisal to contradict it.
4) Does FHA mortgage make a difference vs conventional?
Answer: See #1 above.
I recommend that you first check the FHA database mentioned above
http://www.hud.gov/offices/hsg/comp/refunds/index.cfm
for information on your loan.
Because each loan is special, and because getting the right answer for
your particular loan might require disclosure of confidential
information on Google Answers (which you definitely don't want to do),
rather than talking to US Bank Home Mortgage at this point, I would
recommend that you contact the FHA directly to determine which rules
apply to your situation. You should be able to count on them to tell
you the truth, whereas financial company representatives have
sometimes been known to present an altered or incomplete version of
the truth to borrowers.
U.S. Department of Housing and Urban Development
451 7th Street S.W.
Washington, DC 20410
Telephone: (202) 708-1112
TTY: (202) 708-1455
http://www.hud.gov
Find a HUD Office near you:
http://www.hud.gov/directory/ascdir3.cfm
Search Strategy
FHA PMI
://www.google.com/search?num=100&hl=en&lr=&ie=UTF-8&oe=UTF-8&safe=off&q=FHA+PMI&btnG=Google+Search
Before Rating my Answer, if you have any questions about this
information, please post a Request for Clarification, and I will be
glad to see what I can do for you.
I hope that this Answer has provided exactly the information that you
needed, and that you will be able to immediately eliminate the PMI
portion of your mortgage payment!
Regards,
aceresearcher |
Request for Answer Clarification by
markp-ga
on
24 Jan 2003 18:06 PST
This is mostly FYI: I did purchase after Jan 1, 2001.
You said:
From the U.S. Housing and Urban Development's website section
"Home > About HUD > Housing > Single Family > Buying a home":
"HUD and FHA Making Homeownership More Affordable for You:
The Homebuyer Savings Plan eliminates the annual insurance premium (on
loans closed on or after January 1, 2001) once you have paid off 22
percent of your loan. This saves you money while still providing FHA
insurance for the life of your loan."
http://www.hud.gov/offices/hsg/sfh/buying/savplan.cfm
this was a good link. It seems like a grey area. I originally put 20%
down on the first loan, but then refinanced with a different company,
so I owe more now.
FYI from HUD website:
TAKE a PERMANENT PREMIUM VACATION
The Homebuyer Savings Plan eliminates the annual insurance premium (on
loans closed on or after January 1, 2001) once you have paid off 22
percent of your loan. This saves you money while still providing FHA
insurance for the life of your loan.
With premium elimination, a family purchasing a $100,000 home would no
longer pay annual mortgage insurance premiums, currently .5 percent
(50 basis points), once the loan amount drops to $78,000. The
termination of the monthly premium payment represents a total savings
of approximately $3,800 over the life of the loan. When combined with
the reduction in up front premiums, you will save a total of about
$4,500.
note the words a "100,000 home" meaning the value of the home, at
least calculated at the time of purchase. This is NOT the mortgage /
loan amount.
My loan amount is around 90% of the purchase price, because I
originally put %20 down, refi'd and rolled up some costs into the
loan. However I do exceed the 78% LTV, (loan to value ratio), if they
go by that.
On the other hand:
The Homebuyer Savings Plan eliminates the annual insurance premium (on
loans closed on or after January 1, 2001) once you have paid off 22
percent of your loan. - This information is contradictory or
ambiquious at best. It is possible the example above is assuming the
buyer has put nothing down on the house, and it may not be accurately
reflecting HUD's policy.
I will be attempting to call hud and find someone who agrees with me,
and can send me something official to show my mortgage co.
|
Clarification of Answer by
aceresearcher-ga
on
24 Jan 2003 19:03 PST
markp,
I agree with you totally: these days, because of appreciation,
refinancing, and other factors, "paying off 22% of your loan" is
rarely equivalent to "78% LTV", except at the very start of the loan.
I would be glad to get your situation clarified with HUD for you, but
since they (rightfully) will not discuss your loan with anyone else,
because you shouldn't be giving out confidential financial information
to me anyway, and because it sounds like there are a number of factors
making your situation more complex, calling them yourself to get
confirmation that you are now eligible to discontinue PMI is
definitely the best course to take. I do believe that you are eligible
to do so; the tricky part will be getting your appraisal from Ditech
and getting HUD and US Bank Home Mortgage to accept that appraisal.
Even if they don't, if you can scrape up the cash for an approved
appraiser, I think you will be able to kiss your PMI goodbye.
Best wishes for a lowered mortgage payment and increased financial
prosperity in 2003!
P.S. My husband always joked about sending me to "Jeopardy" or "Who
Wants To Be A Millionaire" so that he could retire, but we never got
around to it. But then, I wouldn't want to give up my "lucrative" job
as a Google Researcher, would I? :)
aceresearcher
|
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