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I need heip. I'm paying more on my house than what its worth.

Can anyone help me. My house was built in the 80's. I have a 3 bedroom house. Single Family home and I'm paying more on it than what its worth. My PMI it's 230.00 aa month. My interest rate is 2.625.I don't understand why I'm paying so much on my house, My house payment is 812.00 a month. (Thanks)
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November 09 2012 - US
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Answers (5)

What kind of help are you looking for?  Do you need help understanding the various fees?
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November 13 2012
Now the election is over...

A hallmark of Obama's second term will be wide scale mortgage debt relief.
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November 13 2012
I see why you are concerned.  Let's see if we can figure this out.

First, we need to look at your PMI.  PMI is the mortgage insurance that is paid if you did not put 20% down on the loan.  PMI is generally 1/2 of 1% of the loan amount then divided by 12 to give you a monthly payment.  With a PMI of $230 per month, you would be looking at a loan of $552,000 with 0% down.  I doubt this is the case.  So, I bet your PMI includes the monthly pro-ration of your real estate taxes and property insurance.  If so, then $230 is not unreasonable.

You can eliminate your PMI by getting 20% equity in the property either through value appreciation, remodeling or paying down your mortgage.  If you think the property is worth 20% more than your loan balance, talk to your lender to see if they can eliminate the PMI. Of course, you will still need to set aside money for your taxes and insurance premiums.

Your interest rate is very low which makes me wonder if you are on an ARM (adjustable rate mortgage).  If so, then your rate will adjust to market rates after a certain amount of time (generally 3 - 5 years).  This will increase your payment.

If you have 20% equity and an ARM, you could look into refinancing for a 30 year fixed mortgage.  It would no doubt lower your total payment and lock the payment at that amount.

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November 13 2012
Why do you think it is too much? How much do you owe? 
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November 09 2012
You didn't tell us what the loan amount is, we need that to know the rest. You can't even rent a place here for less than $900/mo so it sounds ok to me.
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November 09 2012
 
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