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I am currently looking to refinance my current ARM mortgage(within the next month and a half).
I have a question about avoiding the Mortgage Insurance premium.
This is our main home, bought two years ago, as a Hud repo. I think we got the house at a 10% savings over market value at the time.
I understand you have to have 20% equity to avoid MPI. Should I have an appraisal done before we look for financing, because in my experience, an appraisal done by the finance company always comes in at the loan value.
I am not looking to cash out I just want to avoid the $100 monthly tacked onto my mortgage.
Any help is greatly appreciated.
Mortgage insurance(PMI) is required by the type of loan you get.
There are programs that don't require you to have insurance.
If your not looking to cash out your equity for some time I would suggest obtaining a fixed rate,there are several different programs available that range from 30 yrs to 5 yrs.As for the appraiser not going with your brokers appraisor could also work againts you if the value comes in too low.
Hope this helps :D
Here are some good way to determine the 20% factor. If your home comp’s or compares to other homes in the area at a certain price range 20% over your original purchase price than you can consolidate refinance rate/term into a loan product of your choice. Few ways of doing comparables are the following:
1) Drive your neighborhood in 3 mile range and pick up those For Sale Flyers. See if they compare to your home and if they do than you have yourself a “comp” (Comparable).
2) Sometimes a Real Estate Agent is nice and will comp your home using his/her Multiple Listing Service (MLS) so you may want to call the person whom helped you buy the home. If you do not have a Real Estate Agent than call the one that keeps sending you the postcards in the mail.
3) Try www.realtor.com or your local news website that might be powered by MLS.
Now if your home has 10% equity in the home already you can actually refinance to one interest rate = one payment at 90%. The interest rate might be higher than your original rate, since most are these days but again you accomplished your goal of obtaining one loan and one payment. If you have any more questions please PM me or post here and I will respond. What city, state is the home located?
thanks for suggestion, i m recently agree with you ,there are few people who share this type of information
thanks a lot.
Well….there are many ways of getting to a solution…may be the one you say is not the most appropriate one….but whatever….;-)
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