Profile picture for oneregent

Refinance

Hello, I bought a house a  year and a half ago at 4.125% with PMI for 325k, the value of my property has increased to approximately 380k.  Is it advisable to refinance at 4.50% and get rid of the PMI or should I just wait until I meet the 20% equity aspect of the mortgage?
  • September 11 2013 - Granada Hills
  • 0
    0Yes

  • Report a Problem

    Please enter a valid email address.

    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.

    We're sorry. This service is temporarily unavailable. Please come back later and try again.

Be a Good Neighbor. Be respectful and on-topic. No spam or self-promotion! See our Good Neighbor Policy.

 
 

Answers (5)

Oneregent, Another thing to consider is that if your PMI goes away when you get your balance to 80% of the original purchase price. Then you'd have no PMI and you'd keep the lower rate. Check with your servicer to see if they'll drop the PMI with a new appraisal only.
  • September 11 2013
  • 0Yes

  • Report a Problem

    Please enter a valid email address.

    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.

    We're sorry. This service is temporarily unavailable. Please come back later and try again.

Hi oneregent! It might be a close call but it will depend on how the numbers really play out for you.  There a couple of things to keep in mind. First, the first few years of a mortgage payment don't make much of a dent on the actual balance as most of it is gong to the interest.  Second, is what the appraisal will actually come in at, and third is what are interest rates going to be when you actually reach the 20% loan-to-value (LTV)? 

Your principle and interest payment is probably somewhere around $1,600 per month, and for a year and a half of payments, if we were to assume your balance was somewhere around $300K then you'd be right around 78.9% LTV. PMI is needed at 80.01% LTV or above, which only leaves you 1.11% room for variation on the appraisal. 

Rates have definitely risen as well and are most likely going to continue in that direction, so that being said it might also be to your benefit at the same time. You need someone to do detailed research and help present you with your options and a detailed game plan on how it might all play out.  I've dealt with this exact type of scenario on many occasions and would be happy to offer my services to help you decide how to proceed. Please feel free to contact me and best of luck with your refinance! 

Best,
Mark Stewart ~ 30 years in the business. 
  • September 11 2013
  • 0Yes

  • Report a Problem

    Please enter a valid email address.

    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.

    We're sorry. This service is temporarily unavailable. Please come back later and try again.

Profile picture for PaulMcCausland
That depends on the amount of PMI that you are now paying. Contact me.I'm here to help,
Paul
  • September 11 2013
  • 0Yes

  • Report a Problem

    Please enter a valid email address.

    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.

    We're sorry. This service is temporarily unavailable. Please come back later and try again.

Profile picture for daveskow

if your loan to value ( ltv)  is  86%   ( 325/380)   what sort of program are you considering  with no mortgage insurance ?

  • September 11 2013
  • 0Yes

  • Report a Problem

    Please enter a valid email address.

    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.

    We're sorry. This service is temporarily unavailable. Please come back later and try again.

It might make sense to eliminate the PMI if you can.  You can select a lender here in the Zillow directory of mortgage lenders.  I'm sure someone can run numbers for you.  Good luck
  • September 11 2013
  • 0Yes

  • Report a Problem

    Please enter a valid email address.

    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.

    We're sorry. This service is temporarily unavailable. Please come back later and try again.