Question about PMI.  I am purchasing a house at a discount to appraisal value.  I am puting 16% down so of course

I will have to pay PMI.  My question is if the house appraises immediately high enough to make my LTV atleast 80/20

can I ask mortgage company to cancel PMI???

Thanks

The short answer is no.  However, after paying on it for two years and you have made all payments on time you can have a new appraisal done by an appraiser that your lender selects and if it is 75% LTV most will allow you to drop it at that time.  The other option is to see if you can find a lender that can do a line of credit in second postion so that your first mortgage is at or less than 80% so that you don't have mortgage insurance.

You can ask, but the appraisal will need to be spot on when the time comes. Have you ever thought about throwing a 2nd lien on the property to avoid the PMI altogether? I would take a look at a 75-10. This would require 15% down and you would take no cltv adjustments to the first mortgage rate. You could even go with an 80-10-10 if you wanted. This would allow for only 10% down and still avoid the PMI. This would certainly be the best option if you thought you could pay the 2nd down quickly. You would then be left with only a 1st mortgage payment at a lower total loan amount and no PMI.

Feel free to contact with any questions.

Take Care,

Jason

I don't know of a single 2nd mortgage lender that is going above 80ltv. Not even small local banks. My state is mostly in a declining market so that may have something to do with it.

I had an old client get his PMI cancelled after 12 months. I closed his purchase with Citimortgage. He called them 12 months later and they sent out an appraiser. Value was there and PMI was removed.

It may be worth looking into refundable single premium financed MI. If you are able to get the PMI removed after 12 months, you will receive a pro-rated refund of the single premium. There is no monthly with this program so you could compare how much you would pay monthly vs what the pro-rated refund would be.

Good Luck!

That's good to know Jason. If I do a purchase money first, will you close the second simultaneously?

That is a question I get all of the time...I wish they would let us, but all of our piggybacks have to be in conjunction with a PNC 1st. They offer 90% down to a 640 believe it or not (Crazy!!!), so if you ever run into any clients even with a lower score, that just need a 2nd, keep me mind.

Take Care,

Jason

Jason Harris:

That is a question I get all of the time...I wish they would let us, but all of our piggybacks have to be in conjunction with a PNC 1st. They offer 90% down to a 640 believe it or not (Crazy!!!), so if you ever run into any clients even with a lower score, that just need a 2nd, keep me mind.

Take Care,

Jason

2nds above 80%, 1st to 90% with 640...wow...I didn't think PNC liked the mortgage business (I believe they either sold or are trying to sell part of the National City acquisition)...

what MI company is issuing MI above 80% with a below a 680 FICO???

LOL...no we don't get to 90% on 1st's with a 640. That would be nice. We offer the 2nd lien's to 90% with a 640. There are no PMI companies going to 90% under a 680...at least to my knowledge.

As for the National City thing...we have actually been transitioning to their existing platform for the last few weeks and are going live after this weekend. So we are not selling any of that, in fact we are expanding on it. Since 2005 PNC has operated our mortgage division as a JV with Wells. So PNC didn't service anything, we just orginated the loans in the name of PNC Mortgage and transferred the servicing to Wells after closing. Starting Monday all new loans will be orginated in PNC's name and serviced in-house. Looking forward to that...

This joint venture strategy cost us some money during the boom years as we had no servicing revenues, but it was nice when the bottom fell out because we had no bad paper on our books. This is why we were able to buy Nat City with our TARP money.

This does not apply to our home equity division...we scrapped Nat City's and kept what we already have. The 2nd's to 90% that I refer to have been around for quite some time and we portfolio those. I have been waiting for them to tweak the guidelines, but it just hasn't happened.

We do offer some crazy stuff...including a 100% purchase and rate and term portfolio product with no PMI for low to moderate income borrower's and for homes located in targeted census tracts down to a 660. This is currently priced at 5.75% with no points. There are some rumors that this is going away, but nothing firm on it yet.

Take Care,

Jason