Hellobee Boards

You might want to check and make sure that there aren't other stipulations to dropping pmi once you're able. We had pmi for our last house because we didn't have a large enough down payment when we bought. After 2 years, we had enough saved to pay off to necessary percentage. We called to ask about it, and turns out that with our lender, you have to be in the house for 5 years before they'll drop it off, regardless of how much you owe.

@LindsayLou: Well that is disappointing, we dropped it on our last house and are getting ready to refinance and drop it on our new house. I have never heard that but I will keep it in mind if we are not able to drop it when we refinance, thanks!

@NorthStar: Yeah, I just can't see the lender paid being any cheaper in the long term even with deductions.

We were able to drop our PMI this month and there were no stipulations other than paying for the reassessment. We've only been in our house 3 years but it depends on the lender.

@NorthStar: I meant it was disappointing for lindseylou to not be able to remove PMI because of the 5 year wait

@LindsayLou: I would follow up on that, and ask for evidence of the 5 year thing. That sounds like a potential HOPA violation. Do you have a fixed rate mortgage? Google "federal reserve hopa" - 80% borrower requested / 78% automatic termination is the standard.

I agree with @jetsa - PMI if you don't plan on churning over the house! Before you make a decision, ask to see the mortgage insurance disclosure from the lender, that will detail out any stipulations for dropping PMI.

@NorthStar: We have a mortgage with the "PMI" baked into our rate (so your lender placed option). And I did it for the exact reason you mention. I can't deduct any portion of the PMI but I can deduct all of my interest. The problem was I bought the home in 2008 right before the market fallout. I think we are finally recovered in my area and I probably should go through the process of re-financing to get a lower rate and I should be able to avoid PMI at this point.

The only way to get out of that higher rate with the PMI loaded in is to go through a re-fi.

Do you have a PMI right now?

@NorthStar: Oh okay... Then I would go with the PMI again! Haha.

There is no need to keep paying .2% over the course of your mortgage to avoid PMI. I know a lot of people hate it because it's a hassle to get rid of.

One of my coworkers had a PMI and even though they clearly had 20% equity, their bank made them go through some hoops before getting rid of it. It took them almost a year to finally stop paying it. But even with that hassle they saved money overall.