I was told that PMI stays on the loan for the life of the loan by
an rep of the VHDA (Virginia Housing Development Authority)
regardless of balance/ equity.

Why would this be since the idea of PMI is that you're borrowing
more than the value of the house? The value of my house by the
most conservative of estimates is is 85K more than I owe.
This means that that I'm at about 50% debt to equity. Why are they
telling
me that PMI can't come off my loan? What purpose is it serving?
Is this wrong?

Thanks

Mb

The purpose served is to make money for the PMI company. This was a big
news topic some years ago, because there was an elected representative in
some state that couldn't get the PMI off of his loan, and introduced
legislation to change that. I think many states passed laws to allow PMI to
be removed when a homeowner reached 20% equity. Perhaps Virginia is not one
of those states.

Since you're at 50% equity, you can refinance and you won't have PMI on the
new loan.

S

wrote in message
oups.com...
I was told that PMI stays on the loan for the life of the loan by
an rep of the VHDA (Virginia Housing Development Authority)
regardless of balance/ equity.

Why would this be since the idea of PMI is that you're borrowing
more than the value of the house? The value of my house by the
most conservative of estimates is is 85K more than I owe.
This means that that I'm at about 50% debt to equity. Why are they
telling
me that PMI can't come off my loan? What purpose is it serving?
Is this wrong?

Thanks

Mb

First, with PMI you're not borrowing more than the value of the house.
It "covers" that portion of your down payment that is less than 20%.

Maybe VHDA is like FHA, which has, as I recall, a similar structure. I
don't know if it's this way now but with FHA that extra payment is
always there til you sell or refi. You probably should have looked
into this when you got the mortgage, and you probably signed something
that said you agree.

You should have refinanced long ago when rates were low in order to get
rid of the PMI. You can refi now (but rates have gone up).

At vhda.com it says:

Mortgage Insurance protects a lender if a borrower defaults on a loan.
Mortgage insurance is placed on the loan when the borrower does not
have a sufficient amount of equity or down payment. For a conventional
loan, private mortgage insurance is required on all loans if you are
borrowing more than 80% of the purchase price. For FHA loans, mortgage
insurance is required on all loans, regardless of the amount of the
downpayment.

wrote:
I was told that PMI stays on the loan for the life of the loan by
an rep of the VHDA (Virginia Housing Development Authority)
regardless of balance/ equity.

Why would this be since the idea of PMI is that you're borrowing
more than the value of the house? The value of my house by the
most conservative of estimates is is 85K more than I owe.
This means that that I'm at about 50% debt to equity. Why are they
telling
me that PMI can't come off my loan? What purpose is it serving?
Is this wrong?

Thanks

Mb

wrote:

At vhda.com it says:

Mortgage Insurance protects a lender if a borrower defaults on a loan.
Mortgage insurance is placed on the loan when the borrower does not
have a sufficient amount of equity or down payment. For a conventional
loan, private mortgage insurance is required on all loans if you are
borrowing more than 80% of the purchase price. For FHA loans, mortgage
insurance is required on all loans, regardless of the amount of the
downpayment.


I saw this part but nowhere does it say that it stays on for the
remainder of the loan. All that addresses initial qualification for
the loan, not duration. I'm going to have to look at this again, and
go through my paperwork. I don't want to refi because I don't want
the expenses associated.

If I could just drop that part of the payment I'd be fine.

MB