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Answers (10)
- Clay Branch, "Georgia Loans"
- Contributions:7835
Shap, great answer, wrong thread but hey, it's Valentines Night so no one noticed.
Jabake, it will be determined by whether you have a " high risk " loan or not. I can not tell if High Balance agency loans fall in that category but if you have a non agency loan then it will be high risk and in that case the point for removal is "midpoint". The Dodd-Frank bill has proposed amendments to the HPA but that bill is as long as Obama care so it may take awhile to pinpoint what they are, good or bad.
Jabake, it will be determined by whether you have a " high risk " loan or not. I can not tell if High Balance agency loans fall in that category but if you have a non agency loan then it will be high risk and in that case the point for removal is "midpoint". The Dodd-Frank bill has proposed amendments to the HPA but that bill is as long as Obama care so it may take awhile to pinpoint what they are, good or bad.
- shapiroamg
- Contributions:3058
Cash out on a conventional mortgage is only up to 80%. Conventional rates on a condo with less than 25% equity and assuming a 740 credit score are right around 4%.
FHA will go to 85% on a cash out refinance but your condo needs to be on the FHA condo list. If its not there then you need to find a lender willing to approve it and I believe those lenders are few and far between.
FHA will go to 85% on a cash out refinance but your condo needs to be on the FHA condo list. If its not there then you need to find a lender willing to approve it and I believe those lenders are few and far between.
- Clay Branch, "Georgia Loans"
- Contributions:7835
Sorry, I looked at the balance / value too quickly, didn't catch it's upside down. I think your balance may indicate a higher risk loan so would have to read the act again for exceptions on that. Is this a conventional loan or FHA?
- Clay Branch, "Georgia Loans"
- Contributions:7835
jabake1, the way I interpret it is if you initiate it at 80% the lender will check the current value and if that is not showing 20% equity then it should come off automatically at 78% of the original value. Since you know it wont appraise with 20% equity now maybe you should not initiate anything and wait out the extra 2%.
- jabake1
- Contributions:3
Thanks Clay...No I do not have 20% equity on the current value. I owe ruffly 470K and the home is should appraise around 420K.
- Clay Branch, "Georgia Loans"
- Contributions:7835
jabake1, that is correct but the lender will check appraised value. Do you have 20% equity based on current value?
- jabake1
- Contributions:3
Reading through the Homeowner's Protection Act it looks as though MI can be dropped after reaching 20% of the original loan value. Am I reading this wrong?
- Bob Willett, "SacRELender"
- Contributions:194
The answer to your question is yes, you will be stuck with mortgage insurance if the appraised value does not give you 20% equity. However FHA, VA, Fannie Mae, & Freddie Mac all have programs that might be worth looking into. The FHA program will have mortgage insurance regardless, so it should be your last resort – especially since their mortgage insurance rates are quite high. VA will charge a new funding fee, but it's not too expensive. The best option may be the HARP program that Clay mentioned. It only works if your current loan is owned by either Fannie or Freddie, but if it is, you can refinance up to 105% (or even 125% in some cases) and not have to pay any mortgage insurance.
Additionally the HARP program has recently been augmented to help more people refinance, but it appears that refinancing at over 125% loan-to-value won't be available until February or March.
- Rudi Hofmann, "LUXURY HOME LOANS CA"
- Contributions:7435
- Clay Branch, "Georgia Loans"
- Contributions:7835
When trying to refinance, will the bank require a new appraisal (which will come in significantly lower than the current loan amount
If your home appraises for less than the loan balance then you can not refinance unless you qualify for Harp, or have an FHA or VA loan. If you qualify for Harp and do not have mortgage insurance now, then there is no mortgage insurance on the refinance.
If your home appraises for less than the loan balance then you can not refinance unless you qualify for Harp, or have an FHA or VA loan. If you qualify for Harp and do not have mortgage insurance now, then there is no mortgage insurance on the refinance.
Dropping Mortgage Insurance
In order to drop mortgage insurance are you required to have 20% equity based on the purchase price of the home or the current value of the home. When trying to refinance, will the bank require a new appraisal (which will come in significantly lower than the current loan amount) and stick me with MI until I reach 20% equity of the new appraisal.
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