Reply to trying to advise friend -- is it wise to refinance to a 15-year mortgage?

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Reply to "trying to advise friend -- is it wise to refinance to a 15-year mortgage?"

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[quote=Anonymous][quote=Anonymous][b]If the house has appreciated enough to remove PMI based on that alone, they can request PMI cancellation and get it removed from the current loan.[/b] Then throw extra payments at the existing loan.

That's one option. Another would be to seek out a 20-year.

15-year loans are obviously the best in the long run, but if your friend is nervous about the payment it might add a layer of anxiety that isn't worth it, if they can have the choice of whether to throw extra at the mortgage. [/quote]

Actually, this is not true.  Wells Fargo won't let you remove PMI due to house appreciation alone.  You have to show receipts that you've made improvements in the same amount as the increase in value.  Wells Fargo is horrible, by the way.  This was truly a bait and switch situation.   My friends were given the impression they could remove the PMI so long as they paid it for 2 years and the LTV was at a certain ratio.  They were never told in the beginning that that LTV couldn't be based on market appreciation alone and had to be based on improvements.
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