Posted by cp on February 18, 2005 at 17:44:14:
The threat to refinance amy change WF’s mind though. How about a home equity loan, based on an increase in equity, and use that to pay off up to 80%?
PMI Problem - Posted by C. Nutt
Posted by C. Nutt on January 07, 2005 at 09:06:22:
This is a great forum and I have learned much here over the last two years. I now have a situation of my own that I am confused about. My wife and I have been house hopping for five years now and each time we bought a house (and moved in) we did so with about 5% down. The mortgage companies charged us PMI that we accepted knowing we could remove it once our remodeling was complete and an appraisal showed we had better than 80% LTV. Now however, Wells Fargo is telling us that we cannot remove PMI using an appraisal (we have put in over 80,000 into this house), that we must make a lump sum payment to remove the PMI. Wells Fargo states that their rules for this loan do not allow anything other than a lump sum payment or a specific amount of time before the PMI can be removed.
Has anyone heard of this before?
Re: PMI Problem - Posted by River City
Posted by River City on January 11, 2005 at 06:24:13:
It’s called “mortgage seasoning” and most lenders require this. They are protected by the PMI and until they know that the borrower is committed to the loan, they do not want to release them of the PMI. The Homeowners Protection Act of 1998 allows the seasoning requirements. The Act protects the rights of the borrower and the lender.
Re: PMI Problem - Posted by Dave T
Posted by Dave T on January 08, 2005 at 23:57:28:
Wells Fargo is not unique here. Countrywide also has similar PMI requirements. I suspect all the major mortgage lenders follow the same rules allowed and specified by federal law.
The Countrywide rule is after you have made ontime payments for 24 months, you can request a PMI waiver if a new appraisal shows that the loan to appraisal value is less than 80%. Otherwise, you have to pay down the loan balance to 78% (or less) of the original purchase price.
If the loan is an FHA insured loan, there is never a waiver of the mortgage insurance. If you have had late pays, the lender does not have to honor your request for PMI waiver. If you are in a high risk category (based upon credit score, I presume), the lender does not have to waive PMI until the mortgage balance is under 80% of the original purchase price.
Re: PMI Problem - Posted by eric
Posted by eric on January 07, 2005 at 17:40:58:
I haven’t heard of that myself, but it doesn’t surprise me. I’d just re-fi it with another lender and pull the income from Wells Fargo.
Re: PMI Problem - Posted by Dave T
Posted by Dave T on January 15, 2005 at 19:50:41:
Refinance is most likely more costly than just paying the PMI for two years, especially if there is a prepayment penalty. Wells Fargo is not receiving the PMI premiums, the mortgage insurer is getting them.