So Ms. Bright and I bought a house in 2008. We refinanced in 2013 (18-year fixed FHA). We have been making double payments since 2008 and we are well below 78% of LTV, but Wells Fargo says we have to pay PMI for 60 months from 2013. Everything I read indicates that the FHA only requires PMI for 60 months from the original purchase date.
Who’s right?
What does your refinance documentation state?
It doesn’t. It’s a searchable PDF, so I’m quite sure about that.
I would bring it in to a banker (not call, walk in) and ask them to remove the PMI. If they say the same thing, that it can’t be taken off for 60 months, then very nicely, playing dumb (like you hadn’t already asked earlier), say ‘I’ve got the paperwork right here, it doesn’t say anything about that, can you show me?’.
They’ll probably tell you to call, but I would just ask for a supervisor or the branch manager. If they keep refusing, I’d then call again and see how high you can get it escalated. But eventually you might need to go to whoever oversees banks/mortgages in your county/state and get them to deal with it.
I’d suggest you just refi with another bank, but you shouldn’t have to shell out thousands of dollars just to get the PMI taken off.
Hopefully, if you just keep demanding that someone shows you where it says that, they’ll give in and remove it. OTOH, it might turn out that it does say that somewhere and you missed it. You do sign a lot of stuff when you refi a house.
From the bank’s perspective, it would make more intuitive sense for PMI on a loan to count months from when the loan was created (2013) than some date that doesn’t have any direct relationship to the loan in question (when the collateral last changed hands in 2008.)
Why would a bank who gave you a loan in 2013 care about the 2008 date, well before they had any interest in the property?
It’s definitely not in any of the mortgage paperwork. I think the problem may be that it’s an FHA requirement rather than a Wells Fargo requirement.
If it’s an FHA loan then MIP (not PMI) might be for the life of the loan. You’ll have to refi with a non-FHA loan to get rid of it. Lots of good info here.
All true. But not relevant.
The OP has paid the mortgage down to the point that the LTV would not otherwise require PMI. So to the uninformed observer (e.g. me) that would imply he can terminate the PMI.
Yes, we didn’t cash out or anything, so we’re still well below 78%.
And Smell, our refi predates June 3, 2013. So we’re not in the “PMI forever” group.
FHA MIP (not PMI) is based on the mortgage term, not the sales contract date.
http://portal.hud.gov/hudportal/documents/huddoc?id=13-04ml.pdf
Edit, better link, straight from HUD
http://portalapps.hud.gov/FHAFAQ/controllerServlet?method=showPopup&faqId=1-6KT-1048
FHA requires that the LTV<78%, relative to the value at the time of the loan; you don’t get to count any appreciation since then. Rates are still low; is it possible that refinancing again to a conventional loan would make sense for you? That’s how we got out of our PMI a few months ago.
Thanks, enalzi.