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[quote=Anonymous][quote=Anonymous][quote=Anonymous][quote=Anonymous][quote=Anonymous][quote=Anonymous][quote=Anonymous][quote=Anonymous]I would never take a higjer interest rate  in return for no PMI. At least when your LTV hits 80% you can remove the PMI. I'd rather that than being locked into a higher than necessary mortgage for 30 years. You pay way more in the long run by essentially rolling PMI into your loan.[/quote]

You can remove the PMI, but don't you have to refinance?  If it takes 5 years to get 20% equity in your house, what's the likelihood that rates will be at 4.5%? [/quote]
Exactly. They won't be. That's why you can pay down your rate even though rate was slightly higher. [/quote]

This is all wrong. [b]You don't have to refinance to remove the PMI.[/b] When you hit 20%, you can request the lender drop it - and they have to do so at 22% equity. That could be a combo of you paying down your principal and the house appreciating in value. But whatever the case, your rate is your rate. We're paying 3.62% regardless, with PMI now and without PMI by next year. [/quote]

[b]Except for FHA loans.  I think that's where the confusion is.  They changed FHA loans a few years ago to where the pmi is for the life of the loan.[/b]

But if you have good credit and can go 5 percent, a conventional loan is far better than an FHA.  The PMI is a lot less and comes off when you have 22 percent equity.  The lender should be able to pinpoint when exactly that is based on just paying your monthly mortgage.[/quote]

And of Dec 2015, my FHA loan I signed does not have pmi for the life of the loan. The 20% equity clause to have it removed is in my paperwork. [/quote]

So is the FHA loan I took out in March 2013. I have to pay PMI for 5 years and then can take it off as long as I have 20% equity  (which I already do). I actually looked into refinancing last year, and my original loan officer advised me not to because my interest rate was so low and I would be able to eliminate the PMI in just two more years. [/quote]

Word of caution: We had an FHA loan (taken out in 2011), and like you I thought mine "timed out" in 5 years. Turns out, there were two criterion:

1. 5 years mortgage insurance payments
and
2. A little more than 20 percent equity gained in the house (based on original purchase price) -- for us, that was going to take an additional 3 years (8 yrs total), and it was only that fast because we were making a couple extra payments every year.

So even for the "old" FHA loans where it is possible to one day slip out of the mortgage insurance, it may not be as straightforward as 'pay in for 5 years.'

We had a lot more than 20 percent equity when I inquired (due to home improvements, appreciation) and decided to refinance. The saved mortgage insurance paid for the refinance, and we got some other benefits out of it.[/quote]

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