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Can I refinance 95% ltv without paying pmi?

by GwenMayor from Marthasville, Missouri. Aug 7th 2016 Reply


Scott Fix (ScottFix)
#1325 ranked lender in California - 184 contributions

Ahhh Ha! The next part of the question. Well Gwen, not really. FHA will get you for PMI for the life of the loan and a convention loan will get you until 80% LTV, and must be released without request by 78% LTV. Lenders may tell you that there is no PMI at 95% LTV, but this is untrue. The loan professional may call it lender paid PMI or LPMI, but in essence, you are still footing the bill. Look at the interest rate in comparison to the APR at the fees. Now, if you are going to be in the home for an extended period of time with the same mortgage, LPMI can save you a small bit of money. If you are not going to stay that long, a monthly PMI payment is prefered. See the link below for a clear easy explanation. Again as I replied to your other question, get with a reputable loan professional to give you the straight truth!. All the best, Scott. http://www.bankrate.com/finance/mortgages/lender-paid-mortgage-insurance-pros-cons.aspx

Aug 7th 2016
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Yes you can absolutely get out of pmi at 95% loan to value. The rate is slightly higher than the par interest rate. Payments are lower with this option but the lifetime savings is better if you pay pmi with a lower rate.

Aug 8th 2016
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William J Acres (William_Acres)
#1 ranked lender in Arizona - 7,802 contributions

YES and NO..If you qualify for VA benefits, then you can refinance into a VA loan,and there is no monthly MI.. But the VA does charge an upfront "Funding Fee" which is waived for disabled veterans..You can also do what is called an 80/15/5 loan.. 80% first mortgage, 15% 2nd (if you can find a lender willing to go 2nd position at 95% CLTV), and 5% down.. but the reality is that even if you can find a lender willing to do this, the rate of the 2nd would probably make your payments higher than if you just pay MI.. So aside from VA and the 80/15/5, then unless you have 20% or more down, you will pay PMI.. regardless of how it's pitched to you.. Aside from "Borrower Paid Monthly PMI" There's several ways to pay for PMI if you don't have 20% down.. there's upfront MI.. this is where you pay a one time payment upfront and there's no monthly MI.. there's also lender paid MI, but all the lender does is raise your rate and then pay the MI for you.. and there's what they call split premium which is a combination of the two.. but if you look at all the different ways, regardless of how it's pitched to you, it's always YOU paying the PMI.. And with the exception of "Borrower Paid Monthly" every one of these other types of PMI are non cancelable, no refundable.. But here's the reality.. if you have really good credit scores, then the PMI payment for every $100K financed is less than $35 per month.. and once you have paid for 2 years, and once you have reached 20% equity, you can contact your lender and ask to have the PMI removed.. so long as the value is there (supported by an appraisal you pay for), then they will remove the PMI and you wont have to refinance to do it.. I'm a Broker here in Scottsdale AZ and I only lend in Arizona. If you or someone you know is looking for financing options, feel free to contact me or pass along my information. William J. Acres, Lender411's number ONE lender in Arizona. 480-287-5714 WilliamAcres.com NMLS# 226347

Aug 8th 2016
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