Can a lender charge you PMI with a 20% down payment??

2 Replies

Hi all. So I was just getting my jollies by reviewing my escrow statements today, and I noticed I'm being charged each month for PMI, even though I put 20% down. I understand you can write to your lender and request they take it off once you reach 80% equity, and I'm going to do that. I had no idea until now this loan had PMI on it - is it even legal for them to do this when you put 20% down?? I never agreed to this, unless they snuck it into some fine print I signed at closing.

Legal yes, common no. I don't know why you'd have PMI with 20% down, Unless you got an fha loan.....fha has MIP on All loans. If it is an fha, your stuck with it for 11 years, with 20% down.

@Mike Day Ah yes, good old PMI. Biggest waste of money for the consumer in the banking industry. I’ve paid it before. Basically, the insurance in “to protect the bank in case I default “ even though my credit is 800 and I haven’t missed any payments to creditors in years! What a scam. The least they should do is refund that darn money, once you hit 80% LTV (78% in some instances). After all, many banks are subject to bailouts and write offs on properties they take back anyways. Rant over. To answer your question you may need to write them a letter informing them of your 80% LTV. Some banks wIll still (scam!) requIre you to keep PMI if your loan Isnt seasoned 3-5 years. In some cases, you may also need to pay for an appraisal (aka, a barrier they put in place to keep you paying PMI - after all, can’t they just run some da*m comps to get the value?!? ) Summary - PMI is a joke. As a consumer, can I get some protection against my bank too? Say in case, they get bought out or possibly go out of business?!? It should go both ways.

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