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FHA and changes to PMI

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TimeToRecover
Established Contributor

FHA and changes to PMI

Hello Everyone it has been a long time since I posted in here for advice since i closed.  it has been exactly 2 years since i started the loan process and build on my home.

 

But I am back again with a question for our experts.  First a catchup on history.

 

Home purchased in November 2014, FHA 10% down.  

Credit mid score at that time was 670ish 

the only baddie was the 41/2 year old foreclosure (June/2010) still on my reports and obviously is the reason i went with FHA (perfect credit since then)

 

I knew when i went FHA I was going to refinance within 3 years into a conventional so that i could remove the MI after i hit the 80% LTV

 

So now why am i asking questions prior to that 3 year mark next year.  I keep getting these spam mails (ya actual snail mail) about the FHA lowering PMI percent.  So i call my original Mortgage Banker (who i will again use when i refi) she answered all my question but I am confused on 1 item and I will check with her again but wanted to bring it here.

 

I was told I can contact my provider (who i asume is who currently still owns the loan, Well Fargo) and ask them to lower the pmi to .85.  To all our wonderful experts on here who helped me so much before can you explain this.  is this something I can just do via a letter? or phone call?  and who exactly do I speak with.  Does anyone have an example letter to do this?

 

Sorry for the long post to get down do just hat last paragraph with my question


Starting Score: 570 ish
Current Score:EX (701) EQ (711) TU (705)
Goal Score: 750
In My Wallet: GE Care Credit (8K) BestBuy (6K) BofA Cash Rewards Signature Visa (7K) Cap One Quicksilver (10.5K) Chase Freedom (4K) Lowes (6K) VS Angel Card (2.4K), Macys (4K)
Message 1 of 10
9 REPLIES 9
StartingOver10
Moderator Emerita

Re: FHA and changes to PMI

I hope one of the LO's steps in soon to answer your question. That would be amazing if it is true.

Message 2 of 10
VALoanMaster
Valued Contributor

Re: FHA and changes to PMI


@TimeToRecover wrote:

Hello Everyone it has been a long time since I posted in here for advice since i closed.  it has been exactly 2 years since i started the loan process and build on my home.

 

But I am back again with a question for our experts.  First a catchup on history.

 

Home purchased in November 2014, FHA 10% down.  

Credit mid score at that time was 670ish 

the only baddie was the 41/2 year old foreclosure (June/2010) still on my reports and obviously is the reason i went with FHA (perfect credit since then)

 

I knew when i went FHA I was going to refinance within 3 years into a conventional so that i could remove the MI after i hit the 80% LTV

 

So now why am i asking questions prior to that 3 year mark next year.  I keep getting these spam mails (ya actual snail mail) about the FHA lowering PMI percent.  So i call my original Mortgage Banker (who i will again use when i refi) she answered all my question but I am confused on 1 item and I will check with her again but wanted to bring it here.

 

I was told I can contact my provider (who i asume is who currently still owns the loan, Well Fargo) and ask them to lower the pmi to .85.  To all our wonderful experts on here who helped me so much before can you explain this.  is this something I can just do via a letter? or phone call?  and who exactly do I speak with.  Does anyone have an example letter to do this?

 

Sorry for the long post to get down do just hat last paragraph with my question


Hi Time To Recover,

 

Unfortunately the only way to reduce your FHA MI is to refinance the loan.

 

 

VA Mortgage Expert. Mortgage Banker lending in All 50 States.
VA, FHA, USDA. Jumbo, Conventional.
CAIVRS Expert.
Message 3 of 10
BrianB_The_Loan_Professor
Valued Contributor

Re: FHA and changes to PMI

To get the current MIP rate would require a refi - 

I would stick with the plan to wait it out until you can eliminate the PMI with a refi to a conventional loan

 

B

- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -
Brian B The Loan Professor
Mortgage Banker - offering FHA, VA, USDA , and Conventional mortgages in all 50 states -

If I do not respond to a follow up question please feel free to contact me directly
Message 4 of 10
Anonymous
Not applicable

Re: FHA and changes to PMI

If you purchased in 2014 w/ 10% down, it's likely you have 20% in equity. You may want to consider refinancing into a conventional loan and remove the PMI when the foreclosure wait is up.

Message 5 of 10
TimeToRecover
Established Contributor

Re: FHA and changes to PMI

Thanks for all the answers.

 

Yes my plan is to wait for the refi into conventional 1 day after that 7 year mark.  

 

And DPEEZY what you stated is exaclty what my lender said.  As i said they handled my original loan. and she also said "by next year with the way prices are rizing i may be above the 20% mark and have no PMI at all."

 

So although it kills my thoughts of getting a new car this year to have NO PMI and lower payments for the rest of the loan it is worth it to wait the year.  waiting on the car only so the file looks as clean as possible and will have very low dti

 

I do have another question and this maybe should go over in another board but I have a concern.   i have read of peoples scores actually dropping after a foreclosur dropeed off their reports.  as I said my file is totaly clean now other then that foreclosure.  When it drops in October my oldest will be my student loan that started in 2010 so oldest will be exactly 7 years when i apply for the refi.  should i be concerned about this or am i thinking to much?

 


Starting Score: 570 ish
Current Score:EX (701) EQ (711) TU (705)
Goal Score: 750
In My Wallet: GE Care Credit (8K) BestBuy (6K) BofA Cash Rewards Signature Visa (7K) Cap One Quicksilver (10.5K) Chase Freedom (4K) Lowes (6K) VS Angel Card (2.4K), Macys (4K)
Message 6 of 10
StartingOver10
Moderator Emerita

Re: FHA and changes to PMI

Can't you get a conventional loan now?  I don't think you have to wait the full 7 years  - I thought you could get one after 4 years. Let one of the LO's confirm though

Message 7 of 10
VALoanMaster
Valued Contributor

Re: FHA and changes to PMI


@StartingOver10 wrote:

Can't you get a conventional loan now?  I don't think you have to wait the full 7 years  - I thought you could get one after 4 years. Let one of the LO's confirm though


Only if the mortgage was included in a BK. If it was a straight foreclosure it's a 7 year wait unless you qualify for an exception based on extenuating circumstances.

 

VA Mortgage Expert. Mortgage Banker lending in All 50 States.
VA, FHA, USDA. Jumbo, Conventional.
CAIVRS Expert.
Message 8 of 10
TimeToRecover
Established Contributor

Re: FHA and changes to PMI

Well it was circumstance I had been laid off and searching for about 2 1/2 years.  ironically the same month the foreclosure finished I found my current job.  I did not file BK.  I was so embarassed by the whole situation i basically was stupid and stuck my head in the sand and hoped it would all go away.  "YES it was stupid and I learned my lesson"  I still don't know if bk would have been better or not.  I had shifted to all cash and had no cc's.  which I guess made it an interesting recovery because i basically had to start from scratch on building credit.  One lesson learned was I don't use CC for anything that if an emergency came up I couldn't pay it all off immediately.  Sorta of my own personal credit limit.  The only exceptions are for the big items (house)  Even the car next year I could theoritialy pay it off rather then finance it but obviously depleting savings would not be the best option so it will be financed but i know i have a safty net should something happen.

 

I thought the special circumstance was for FHA and applying before the 4 year mark.  when i finally was over the shell shock and decided to look to buy again it was just past the 4 year mark.

 

The one year additional wait sounds long but the house build took 7 months and that flew by so i can be patient for another 54 weeks Smiley Happy


Starting Score: 570 ish
Current Score:EX (701) EQ (711) TU (705)
Goal Score: 750
In My Wallet: GE Care Credit (8K) BestBuy (6K) BofA Cash Rewards Signature Visa (7K) Cap One Quicksilver (10.5K) Chase Freedom (4K) Lowes (6K) VS Angel Card (2.4K), Macys (4K)
Message 9 of 10
StartingOver10
Moderator Emerita

Re: FHA and changes to PMI

And who knows what you home's value will be in a year they could be much higher if the talking heads are right. Looks like you purchased at a very good time and have recovered nicely. Smiley Happy

Message 10 of 10
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