Close

See current mortgage rates on Zillow Mortgage Marketplace

P.M.I. automatically gone at 78%?

78% is the legal limit where pmi must be dropped?(conventional)
  Flag content
Close
Report a Problem

Please enter a valid email address.

Close
Content flagged

We will review this content. Thanks for helping make the site more useful to everyone. To learn more, read Zillow's Good Neighbor Policy.

Close
We're Sorry
This service is temporarily unavailable. Please come back later and try again.
June 18 2009 - Carrollton
We think we've answered this question for you!
  • Be a Good Neighbor. Be respectful and on-topic. No spam or self-promotion! See our Good Neighbor Policy.
 
 

Answers (17)

user641581, if your docs say 78% and Feb 01, 2012 then that's what it is. Changing the MI terms also raises the APR, fax those docs to your servicer and request the MI be dropped.
  Flag content
Close
Report a Problem

Please enter a valid email address.

Close
Content flagged

We will review this content. Thanks for helping make the site more useful to everyone. To learn more, read Zillow's Good Neighbor Policy.

Close
We're Sorry
This service is temporarily unavailable. Please come back later and try again.
April 13 2012
Profile picture for user641581
Thank You all for the good information, you have really helped!  

When I purchased these properties I was told that PMI would end at 78%. The PMI disclosuer document I signed at closing states an exact date when PMI will end, FEBRUARY 01, 2012,  and even bold faced that date and the 78% figure.
 
The investment numbers I ran on these properties relied on the above information. Their still good properties. Instead of paying 20% on one property, I paid 10% on two and I am still getting a great return. Still, 78% is not 70%, and the other bank now says 65% on theirs. At least these are the numbers today, tomorrow who knows?

Figures can lie and ...

But again, let me thank you all !
  Flag content
Close
Report a Problem

Please enter a valid email address.

Close
Content flagged

We will review this content. Thanks for helping make the site more useful to everyone. To learn more, read Zillow's Good Neighbor Policy.

Close
We're Sorry
This service is temporarily unavailable. Please come back later and try again.
April 13 2012
Profile picture for user738354
Finally, found a pretty good document explaining all the details on cancelling PMI. The requirement for Fannie Mae is on there as well. Hope it helps.

http://www.mgic.com/pdfs/71-41599hopa.pdf 

  Flag content
Close
Report a Problem

Please enter a valid email address.

Close
Content flagged

We will review this content. Thanks for helping make the site more useful to everyone. To learn more, read Zillow's Good Neighbor Policy.

Close
We're Sorry
This service is temporarily unavailable. Please come back later and try again.
April 11 2012
user738354:

Here is the letter stating that you may request cancellation earlier than provided in the initial amortization schedule base on actual payments.

Homeowners Protection Act
  Flag content
Close
Report a Problem

Please enter a valid email address.

Close
Content flagged

We will review this content. Thanks for helping make the site more useful to everyone. To learn more, read Zillow's Good Neighbor Policy.

Close
We're Sorry
This service is temporarily unavailable. Please come back later and try again.
April 11 2012
Profile picture for user738354
I just looked over the HPA guidlines and it was clearly stated the 78% must be based on scheduled amortization of the loan. In other word, it will likely take you more than 5 years to reach that anyways....do a simple math: 5x$900 = $4500 just to cover the PMI fees! Advice for the people out there looking for a first mortgage without the 20% down payment. It's probably better/easier just go ahead and get a second loan to cover the difference instead of taking the PMI route.

  Flag content
Close
Report a Problem

Please enter a valid email address.

Close
Content flagged

We will review this content. Thanks for helping make the site more useful to everyone. To learn more, read Zillow's Good Neighbor Policy.

Close
We're Sorry
This service is temporarily unavailable. Please come back later and try again.
April 11 2012
Yes at 78% a conventional loan must drop the PMI automatically but it is 78% of the appraised value at time of refinance or 78% of original value at time of purchase or loan value (i.e. Purchase price of home is 200K value was 220K the 78% would be derived from the 200K value)....
Also I would strongly encourage you to write a letter to and then fax and mail in certified to your mortgage servicer to review to drop the PMI....that way you get a legit answer from the mortgage servicer on what value they are utilizing to establish that 78% benchmark!
  Flag content
Close
Report a Problem

Please enter a valid email address.

Close
Content flagged

We will review this content. Thanks for helping make the site more useful to everyone. To learn more, read Zillow's Good Neighbor Policy.

Close
We're Sorry
This service is temporarily unavailable. Please come back later and try again.
April 11 2012
Profile picture for user641581
I am below 78% based on the lower of  both original sale price and appraised value on both properties. Both current mortgage servicing companies and Fannie not present at closing. Never owner occupied, residential investment properties. When concerning PMI, what is the controling legal authority?
  Flag content
Close
Report a Problem

Please enter a valid email address.

Close
Content flagged

We will review this content. Thanks for helping make the site more useful to everyone. To learn more, read Zillow's Good Neighbor Policy.

Close
We're Sorry
This service is temporarily unavailable. Please come back later and try again.
April 11 2012
Both of these scenarios sound like you are trying to use current market values and that you have not paid the loan down to 78% of the original sales price/appriased value.  It will drop off once you hit 78% of the orginal sales price or original appraised value, whichever is less.  This is the law unless you have a FHA loan.

However, if you are trying to use current market value to get the PMI removed, then there are different guidelines for removal. 
  Flag content
Close
Report a Problem

Please enter a valid email address.

Close
Content flagged

We will review this content. Thanks for helping make the site more useful to everyone. To learn more, read Zillow's Good Neighbor Policy.

Close
We're Sorry
This service is temporarily unavailable. Please come back later and try again.
April 11 2012
Profile picture for user641581
What about non - owner occupied residential investment property? I have two properties: one held by Fannie and the other not, but have been told PMI will end at 70% and 65%, respectfully. 
  Flag content
Close
Report a Problem

Please enter a valid email address.

Close
Content flagged

We will review this content. Thanks for helping make the site more useful to everyone. To learn more, read Zillow's Good Neighbor Policy.

Close
We're Sorry
This service is temporarily unavailable. Please come back later and try again.
April 11 2012
Pull your mortgage note out and read it, I really do not think you will find that verbiage but you can school me if it is. 
  Flag content
Close
Report a Problem

Please enter a valid email address.

Close
Content flagged

We will review this content. Thanks for helping make the site more useful to everyone. To learn more, read Zillow's Good Neighbor Policy.

Close
We're Sorry
This service is temporarily unavailable. Please come back later and try again.
April 10 2012
Profile picture for user738354
Well here's how Chase explained it to me, quoting "due to the fact my loan is a Fannie Mae loan, in order to be considered eligible for PMI removal, in addition of obtaining 20% LTV, the loan must be with us for longer than 5 years. If your loan is longer than 2 years but less than 5, you would need more than 75% LTV". When asked about Freddie Mac loan, the reply I got was "65% LTV when you are more than 2 years but less than 5". Sounds really odd to me. I double checked with the HPA guidelines and it did not mention any changes to that effect.



  Flag content
Close
Report a Problem

Please enter a valid email address.

Close
Content flagged

We will review this content. Thanks for helping make the site more useful to everyone. To learn more, read Zillow's Good Neighbor Policy.

Close
We're Sorry
This service is temporarily unavailable. Please come back later and try again.
April 10 2012
user738354, if you have a conforming loan then the 78% LTV is based on scheduled payments and the original purchase price assuming the appraised value was the same or higher. ( Homeowners Protection Act ) Martin did a fine job explaining it below. If you paid the principal balance down faster than the scheduled payments then MI removal is in play IF your home will appraise high enough now. In the past MI removal at 80% was common due to appreciation/accelerated principal reduction as long as a new appraisal reflected 20% or more equity and you paid MI the minimum # of months, typically 18 or 24. With values dropping over the last several years hitting 80% using a new appraisal would be very uncommon unless you paid a large amount of principal down. If you have an FHA loan then you have to pay the principal balance down to 78% based on the original terms and a new appraisal has no bearing even if you can show an LTV of 10%.          
  Flag content
Close
Report a Problem

Please enter a valid email address.

Close
Content flagged

We will review this content. Thanks for helping make the site more useful to everyone. To learn more, read Zillow's Good Neighbor Policy.

Close
We're Sorry
This service is temporarily unavailable. Please come back later and try again.
April 10 2012
Profile picture for user738354
I have no problem understanding this concept. But I'm hung up on the establishment of the concept of value. Are we talking about 78% of the original value (ie purchase price of the house when loan was first established), or the current value (ie appraised value). Someone also posted earlier about 78% must be scheduled meaning you cannot simply put in more toward your principal in the hopes of having it removed earlier.
Please someone explain.
  Flag content
Close
Report a Problem

Please enter a valid email address.

Close
Content flagged

We will review this content. Thanks for helping make the site more useful to everyone. To learn more, read Zillow's Good Neighbor Policy.

Close
We're Sorry
This service is temporarily unavailable. Please come back later and try again.
April 09 2012
Wrong Denny, I started in real estate in '03 and these are questions my clients are asking me. The lender I was working with retired so they cal/email me the questions they have about their house or mortgage. Cynic be gone :)
  Flag content
Close
Report a Problem

Please enter a valid email address.

Close
Content flagged

We will review this content. Thanks for helping make the site more useful to everyone. To learn more, read Zillow's Good Neighbor Policy.

Close
We're Sorry
This service is temporarily unavailable. Please come back later and try again.
June 18 2009
Cancellation
Under HPA, you have the right to request cancellation of PMI when you pay down your mortgage to the point that it equals 80 percent of the original purchase price or appraised value of your home at the time the
loan was obtained, whichever is less. You also need a good payment history, meaning that you have not been 30 days late with your mortgage payment within a year of your request, or 60 days late within two years. Your lender may require evidence that the value of the property has not declined below its original value and that
the property does not have a second mortgage, such as a home equity loan.
Automatic Termination
Under HPA, mortgage lenders or servicers must automatically cancel PMI coverage on most loans, once you pay down your mortgage to 78 percent of the value if you are current on your loan. If the loan is delinquent on the date of automatic termination, the lender must terminate the coverage as soon thereafter as the loan becomes current. Lenders must terminate the coverage within 30 days of cancellation or the automatic termination date, and are not permitted to require PMI premiums after this date. Any unearned premiums must be returned to you within 45 days of the cancellation or termination date.
For high risk loans, mortgage lenders or servicers are required to automatically cancel PMI coverage once the mortgage is paid down to 77 percent of the original value of the property, provided you are current on your loan.
Final Termination
Under HPA, if PMI has not been canceled or otherwise terminated, coverage must be removed when the loan reaches the midpoint of the amortization period. On a 30-year loan with 360 monthly payments, for example, the chronological midpoint would occur after 180 payments. This provision also requires that the borrower must be current on the payments required by the terms of the mortgage. Final termination must occur within 30 days of this date.
  Flag content
Close
Report a Problem

Please enter a valid email address.

Close
Content flagged

We will review this content. Thanks for helping make the site more useful to everyone. To learn more, read Zillow's Good Neighbor Policy.

Close
We're Sorry
This service is temporarily unavailable. Please come back later and try again.
June 18 2009
I think it's a question AA. I think he's gathering information so he can professionally answer mortgage questions, as he did in this thread.
  Flag content
Close
Report a Problem

Please enter a valid email address.

Close
Content flagged

We will review this content. Thanks for helping make the site more useful to everyone. To learn more, read Zillow's Good Neighbor Policy.

Close
We're Sorry
This service is temporarily unavailable. Please come back later and try again.
June 18 2009
Is that a question or a statement? 
  Flag content
Close
Report a Problem

Please enter a valid email address.

Close
Content flagged

We will review this content. Thanks for helping make the site more useful to everyone. To learn more, read Zillow's Good Neighbor Policy.

Close
We're Sorry
This service is temporarily unavailable. Please come back later and try again.
June 18 2009
 
Related Questions
P.M.I. automatically gone at 78%?
Profile picture for Clay Branch
Latest answer by Clay Branch
April 13 2012 | 17 answers
Looking for Advice to buying a second home as my primary residence.
Profile picture for Rosana Shekman, Broker  ABR
Latest answer by Rosana Shekman, Broker ABR
November 01 2010 | 4 answers
Mortgage Rates
 
Be A Good Neighbor

Zillow Advice depends on each member to keep it a safe, fun, and positive place. If you see abuse, flag it. More on our Good Neighbor Policy.

Homes for Sale
  1. 4216 Phoenix Dr, Carrollton, TX Home For Sale
    4216 Phoenix Dr, Carrollton, TX 75010

     For Sale: $98,500

    • Beds: 2
    • Sqft: 1310
    • Baths: 2.0
    • Lot: 4007
  2. 2807 Monet Pl, Dallas, TX Home For Sale
    2807 Monet Pl, Dallas, TX 75287

     For Sale: $123,000

    • Beds: 2
    • Sqft: 1232
    • Baths: 2.0
    • Lot: 4400
  3. 2055 Christie Ln, Carrollton, TX Home For Sale
    2055 Christie Ln, Carrollton, TX 75007

     For Sale: $179,999

    • Beds: 3
    • Sqft: 1930
    • Baths: 2.0
    • Lot: 10672