Real Estate Advice

[jsarno]

Sorry to use his thread for my own question, but I talked about PMI insurance earlier and realized that my new house is under 80% LTV. I owe around 75k and the house is now worth roughly 110K (I know it probably makes you guys sick to know that housing costs are so low out here, but remember this place sucks)...I'm still paying PMI. How do I get rid of this? I have yet to do this in my homeowner experiences. Any advice?

ps- I have a very good friend that does appraisals if this helps.

[FRPLG]

Originally Posted by jsarno

Sorry to use his thread for my own question, but I talked about PMI insurance earlier and realized that my new house is under 80% LTV. I owe around 75k and the house is now worth roughly 110K (I know it probably makes you guys sick to know that housing costs are so low out here, but remember this place sucks)...I'm still paying PMI. How do I get rid of this? I have yet to do this in my homeowner experiences. Any advice?

ps- I have a very good friend that does appraisals if this helps.

You'll need to refi and depending on your current rate it may not be worth it.

[jsarno]

Originally Posted by FRPLG

You'll need to refi and depending on your current rate it may not be worth it.

There is no other way out of it? So I'll be throwing that money away forever?

[724Skinsfan]

Originally Posted by FRPLG

You'll need to refi and depending on your current rate it may not be worth it.

You may be right, but I was under the impression that PMI is cancelled after reaching 22% of LTV. If that's not the case, then I thought you could request in writing to have PMI cancelled once sufficient proof (ie, appraisal) is provided. I had never heard of having to refinance, but then again it's not something I keep up to date on.

[FRPLG]

Originally Posted by 724Skinsfan

You may be right, but I was under the impression that PMI is cancelled after reaching 22% of LTV. If that's not the case, then I thought you could request in writing to have PMI cancelled once sufficient proof (ie, appraisal) is provided. I had never heard of having to refinance, but then again it's not something I keep up to date on.

Partially correct. I assumed you meant based on an increased market appraisal.

The HPA of 98 mandates that PMI is cancelled immediately upon reaching 22% equity based on original purchase price.

After some research I realized I was wrong. With the super low rates most people have been refinancing to create higher equity, cancel PMI and reduce rates and payments. Now with rates leveling out it is probably not in your best interest to refi so you can request PMI be cancelled once you reach 20%equity or if you provide sufficient evidence that you now have 20% equity due to market value increase. I have never heard of someone doing this but I don't think it is terribly uncommon. Just lately it has been because of market conditions. Usually there will be some type of wait time involved before PMI can be cancelled. I guess 2 years is the norm. That is wait time from loan origination.

[firstdown]

Originally Posted by jsarno

Sorry to use his thread for my own question, but I talked about PMI insurance earlier and realized that my new house is under 80% LTV. I owe around 75k and the house is now worth roughly 110K (I know it probably makes you guys sick to know that housing costs are so low out here, but remember this place sucks)...I'm still paying PMI. How do I get rid of this? I have yet to do this in my homeowner experiences. Any advice?

ps- I have a very good friend that does appraisals if this helps.

I'm
with Wells Fargo (not a job my mortgage Co) and there is 3 different ways to have PMI removed from your loan. The 20% rule is from the purchase or appraised amount at the time of purchase.Then if you make a big enough improvement like a garage, addition etc.. if it increasees the value enough. Stuff like upgrading a bathroom painting do not count. Then there is another way which I cant think of but just call your mortgage co and they should send you the papper work and if you qualify they have to remove your PMI.

[jsarno]

Originally Posted by firstdown

I'm
with Wells Fargo (not a job my mortgage Co) and there is 3 different ways to have PMI removed from your loan. The 20% rule is from the purchase or appraised amount at the time of purchase.Then if you make a big enough improvement like a garage, addition etc.. if it increasees the value enough. Stuff like upgrading a bathroom painting do not count. Then there is another way which I cant think of but just call your mortgage co and they should send you the papper work and if you qualify they have to remove your PMI.

Well, I put in a hot tub, and built a new deck as well as put in new electrical service and redid the kitchen with granite tile tops and new sink with new plumbing.
Not only that, but the market has jumped considerably out here. A house that was 100k 3 years ago, is now worth 150-167k. It's quite a jump.

[EternalEnigma21]

Originally Posted by jsarno

Well, I put in a hot tub, and built a new deck as well as put in new electrical service and redid the kitchen with granite tile tops and new sink with new plumbing.
Not only that, but the market has jumped considerably out here. A house that was 100k 3 years ago, is now worth 150-167k. It's quite a jump.

I'm excited. I close this week on my new house and were spending 280k. Our appraisal came back at 370...

I know its a weak market here, but its nice to know Im starting out with a little bit of equity, according to all comps and data...

[FRPLG]

Originally Posted by canthetuna

I'm excited. I close this week on my new house and were spending 280k. Our appraisal came back at 370...

I know its a weak market here, but its nice to know Im starting out with a little bit of equity, according to all comps and data...

Sounds like you are stealing that house. Good job.

We did that with our second house in Woodbridge. Saw it at an open house an offered 10K less than asking price because we thought they were so off in their price(too low) that maybe they'd go lower. They countered 5k more and we took it. Sold it 14 months later for 115K profit. They missed the price piont so badly on it. There was major development going on just two blocks away on the Occoquan. Building like a mini downtown Alexandria and everything was going to sky-rocket. I still can't believe they sold it for what they did.

[EternalEnigma21]

Originally Posted by FRPLG

Sounds like you are stealing that house. Good job.

We did that with our second house in Woodbridge. Saw it at an open house an offered 10K less than asking price because we thought they were so off in their price(too low) that maybe they'd go lower. They countered 5k more and we took it. Sold it 14 months later for 115K profit. They missed the price piont so badly on it. There was major development going on just two blocks away on the Occoquan. Building like a mini downtown Alexandria and everything was going to sky-rocket. I still can't believe they sold it for what they did.

This house is a forclosure. The bank, however is taking a bath and we sent in a lowball offer 30k off their recently reduced asking price and they countered... then we re-sent the origninal with a 24 hour expiration date and they just accepted...

we took a shot and it paid off... We've put in 6 other offers on other forclosed homes in the area that we didn't get, but we liked this house the most anyway...

The market right now is soft because of all of the ARMs and people getting into houses they couldn't afford and getting forclosed on. Banks are looking to move houses out of their possession and new forclosures are hitting the market daily....

[FRPLG]

Originally Posted by canthetuna

This house is a forclosure. The bank, however is taking a bath and we sent in a lowball offer 30k off their recently reduced asking price and they countered... then we re-sent the origninal with a 24 hour expiration date and they just accepted...

we took a shot and it paid off... We've put in 6 other offers on other forclosed homes in the area that we didn't get, but we liked this house the most anyway...

The market right now is soft because of all of the ARMs and people getting into houses they couldn't afford and getting forclosed on. Banks are looking to move houses out of their possession and new forclosures are hitting the market daily....

Good.. Punish the damn banks for their sketchy ARM loans. Damn idiots may have done some serious damage to our housing market with all their crappy loans.

ARMs and all their avriations basically extended the housing boom artificially by letting people buy houses they couldn't afford. Now that all the loans are defaulting the same ARM loans that kept the good times rolling will have an even greater negative effect as they will continue to degrade the market and keep it down longer than it should be. As an investor that is good for me since it means I will be able to get into properties cheap but overall it is bad for the economy.

[jsarno]

Originally Posted by canthetuna

I'm excited. I close this week on my new house and were spending 280k. Our appraisal came back at 370...

I know its a weak market here, but its nice to know Im starting out with a little bit of equity, according to all comps and data...

WOW...that's a great deal for you.
Fix it up a little, add some things here and there that make it more appealing to others, and you could easily get a return of 100-120k. Congrats man, you hit the jack pot there!