Plainfield, IL · Member since 2016 · 139 posts · 53 votes
I'm thinking about doing a FHA, 203k(rehab loan) on a 4-plex unit. The initial numbers after the rehab work out, but they're not great. I'm willing to go for that since the property is in a great area. My mortgage lender told me i'd be paying about 0.3% extra interest on the loan for taking out the rehab dollars. The monthly PMI would be around $300 for the property+203k loan amount.
The PMI assessed from the 203k rehab budget would cost me around $25 a month, and the addition 0.3% would cost about $100 per month. When would I be able to refinance to remove the PMI payments(At 20% equity). Is there anyway I can remove the PMI that is based off the 203k loan amount? Thanks!
Portland , ME · Member since 2014 · 35 posts · 11 votes
9y
@Adam Juodis I did a refi out of my 203k as soon as the last disbursement was made to my contractor. It worked out great. I didn't hit 20% equity but I did a refi into a physician loan so it didn't matter. I would highly recommend doing the refi if you are planning a longer term rental. Last I heard you are not able to remove the PMI off of FHA loans anymore even when you have 20% equity.
Enfield, CT · Member since 2017 · 73 posts · 26 votes
9y
I'm a newbie but looking into the same situation. From other posts I got an understanding that it's all bank dependent. Some will have a shorter seasoning time than other but most of the time the less of the seasoning the less ltv percentage that will dish out
Please correct me if I'm wrong but basically call as many banks and credit unions to ask what their requirements are.
If you don't ask you are saying no to yourself. Give yourself a shot and ask ask ask.
Portland , ME · Member since 2014 · 35 posts · 11 votes
9y
@Adam Juodis I did a refi out of my 203k as soon as the last disbursement was made to my contractor. It worked out great. I didn't hit 20% equity but I did a refi into a physician loan so it didn't matter. I would highly recommend doing the refi if you are planning a longer term rental. Last I heard you are not able to remove the PMI off of FHA loans anymore even when you have 20% equity.
Plainfield, IL · Member since 2016 · 139 posts · 53 votes
9y
@Christopher Rutherford So as soon as you finished the rehab and got the second half of the funds from the bank, you went to refinance into a physician loan? Did that cost you some fees, and how much did you interest go down?
Doing some google searches and trying to find info about not being able to refinance out of PMI anymore, I can't seem to find anything of the sort. Can anyone else confirm if you can still refinance out of PMI?