Real Estate Agent · Naperville, IL · Member since 2013 · 402 posts · 177 votes
12y
@Chris Stromdahl yes the closer you are to 80% LTV the less PMI % you were pay. Your credit score is also another determinate banks use to put you in a category. Basically, they have a columns ex: 720+ credit score with 85-90% LTV = x% of PMI. So the better credit score, and lower LTV, the lower the PMI will be monthly for you. It will automatically drop off at 78%, but make sure you call bank when you reach 80% to request it be taken off!!! Hope this helps!
Investor · Lewisville, NC · Member since 2014 · 25 posts · 3 votes
12y
It depends on how much positive cash flow you expect and the cost of PMI. I'm putting 15% down on a current property, so I have to pay $16/month in PMI. If that's a cash-flow killer, I'm in trouble already. It's just going to make it a priority for me to get it paid down so the PMI will go away.
Real Estate Investor · Encinitas, CA · Member since 2013 · 225 posts · 91 votes
12y
Agree that PMI is just another cost. I have taken it many times and the deal still made sense.
PMI WILL drop off if the loan is conventional. All it takes is an appraisal.
But if you are getting an FHA loan then it will require a refi. Given today's hostorically low interest rates, that is something to keep in mind. You might have to choose between losing an absurdly low interest rate or keeping MI forever.
Investor · Lewisville, NC · Member since 2014 · 25 posts · 3 votes
12y
@Chris Stromdahl
I have conventional financing, so it will fall off as I get to 20%. Im no finance guy, so I don't have the best answer to your question, but I think it depends on how much you put down and the type of loan. I think it also varies among lenders, and depends on the loan to value ratio as well. Im borrowing less percentage-wise LTV, and I'm pretty close to 20% down, therefore the PMI is very low.
Real Estate Agent · Naperville, IL · Member since 2013 · 402 posts · 177 votes
12y
@Chris Stromdahl yes the closer you are to 80% LTV the less PMI % you were pay. Your credit score is also another determinate banks use to put you in a category. Basically, they have a columns ex: 720+ credit score with 85-90% LTV = x% of PMI. So the better credit score, and lower LTV, the lower the PMI will be monthly for you. It will automatically drop off at 78%, but make sure you call bank when you reach 80% to request it be taken off!!! Hope this helps!