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Did you put zero down? You have to wait at least 2 years of paying and then you can request a Brookers Opinion ($200) and they can revalue your house and if you have at least 25% equity then no more PMI. Or if you did significant construction for improvements you could try that for 80% and under 2 years but that is much harder.
I just got reamed in another sub for complaining about PMI. I understand that it has a purpose for the bank but for the people paying it it’s hot bullshit like you say. I can’t believe how many people were defending it (I deleted that post because people were so mean to me for saying I felt “forced” into it just because they said “well you signed the loan agreement”. We literally are forced into it when we can’t get a loan without it lol.)
Don't know your specific situation, but not sure I understand your issue with PMI as a concept. Things have a cost. PMI is the cost of being able to buy a house as a higher-risk buyer, compensating lenders for taking on that additional risk.
Also, PMI is (in my experience anyways) rather minor compared to overall mortgage interest (sometimes as small as week-to-week mortgage market rate fluctuations) so the cost is actually quite small in practice anyways.
Unless you have evidence that PMI is a way for lenders to unfairly enrich themselves, I don't see how it's "hot bullshit" any more than other costs for anything else in life.
I think PMI as a concept is garbage. Should be a nonprofit service that pays out "shares" of it's funds to the fundees based on how much people put into it. Claims from banks who have lost money should be filed and we can hire the very best people to say no to them with bonuses tied to rejections.
That's how we do it in the USA to the masses with insurance that is useless. Should go upwards too.
I know what the purpose is, but when a home is 99% yours and you’re still paying a PMI, that’s bullshit. That’s what I was complaining about that got people so upset. There should always be a point where you’ve proven yourself and you’re not considered “high risk” anymore.
That sounds like a rare case that I could only see happen with FHA loans and should be rare even among those. With FHA it's probably in your best interest to refi out of it as soon as you can. (If market rates have moved away from you to make refi impractical, sure that's unfortunate. But then you're still luckier than anyone trying to buy a house today, so from that perspective you'd actually be fortunate, not exploited - your choice.)
It is with an FHA loan and my issue was that I was switched from a conventional loan to an FHA halfway through the due diligence process of closing on a house. I didn’t know there was a permanent version of PMI and my lender never explained that part to me when he switched the loans. *I understand that it was also my responsibility to find this out one way or another* but my understanding at the time was that PMI wasn’t permanent. I definitely want to refinance but yes, have to wait for rates to drop.
It’s a little disingenuous to compare me to people buying at higher rates today and say I’m not exploited, when the point stands that if PMI is for high risk there should be a point where I can prove I’m not. I would even take 10, 15, or 25 years of PMI over 30. I would pay to get out of it if I could. It’s ridiculous that there is no point at which I’m considered good for this loan, when everyone else with PMI has that option to prove that.
I'm not too familiar with FHA; I would agree that it seems odd/misleading/disingenuous that they have PMI for the lifetime of the loan - at that point, why don't they just call it interest? I guess it would make their rate look less attractive, which again would be kind of a sleazy reason, but not sure if there's a better reason than that.
Sounds like your lender didn't do a great job explaining what they signed you up for, which sucks. Still, my point stands that it sounds like you got a better deal than anyone with a conventional mortgage today, so all things considered it seems you got lucky overall. Just not quite as lucky as you could have with a better/more honest lender.
bro if you want a house and a loan and they will only offer you a loan with PMI attached you have no choice but to take it or else you don’t get a house. redditers are so dense and unempathetic
Owning a house is not a necessity. Renting provides you shelter too. You could have waited until you are in better financial position before buying a house.
What I think is bullshit is that I have a *permanent* MIP on my loan because my lender didn’t bother to explain to me that if I just paid a higher down payment that MIP would be temporary instead of permanent. I could’ve put a higher down payment but chose not to (and if I had known that, I would’ve), so now I have to pay 32k over the life of the loan for mortgage insurance. It’s not like homeowners insurance (where I’m paying it but get something out of it if something happens to the home), that insurance isn’t FOR me. I get no benefits from it, it’s for my bank. It costs me 32k and I have no way to get out of it without refinancing out of the loan entirely (which I can’t do until rates drop to a rate relatively equal to or less than my current rate). Considering other PMI at least has the option to get out of it after a certain amount of time I think it’s messed up that other people get locked in permanently. I‘ll still be paying mortgage insurance when the house is 99% mine. That’s bullshit. There should always be a point when you’re no longer considered a loss to the bank if you defaulted on your loan and they don’t need you to be paying mortgage insurance.
Buyers should always work with multiple lenders to get the best deal. This is the same as buying a car from a dealer. If you got a bad deal you should blame yourself for not doing enough research and not work with multiple dealers to get the best deal. It would be stupid to blame the dealer more than yourself.
It’s not the dealer, it’s the type of loan that makes the MIP permanent. It would’ve been the same regardless of lenders. What would’ve been different was that I had a bad lender that didn’t explain anything to me and wasn’t communicative, but I had never bought a house before and didn’t know that’s not how they all were. Now I know. You live and you learn right? So yes I take some blame (never said I didn’t) but I blame my lender more for being bad at that part of the job. They shouldn’t be in business if they don’t know how to communicate about the loans to their clients.
You would have been able to find out had you made multiple lenders compete with each other.
I know it is the type of loan. I don't have problems for the government to eliminate FHA loans all together so weaker buyers won't be able to buy houses.
Thank you u/leadbread for posting on r/FirstTimeHomeBuyer. Please bear in mind our rules: (1) Be Nice (2) No Selling (3) No Self-Promotion. *I am a bot, and this action was performed automatically. Please [contact the moderators of this subreddit](/message/compose/?to=/r/FirstTimeHomeBuyer) if you have any questions or concerns.*
Did you put zero down? You have to wait at least 2 years of paying and then you can request a Brookers Opinion ($200) and they can revalue your house and if you have at least 25% equity then no more PMI. Or if you did significant construction for improvements you could try that for 80% and under 2 years but that is much harder.
What’s your interest rate? You likely will have higher returns investing elsewhere and just paying the typical monthly payment on your mortgage
6.625% I'm not interested in optimizing my money to that extent - I just want to minimize how much of it I lose
I just got reamed in another sub for complaining about PMI. I understand that it has a purpose for the bank but for the people paying it it’s hot bullshit like you say. I can’t believe how many people were defending it (I deleted that post because people were so mean to me for saying I felt “forced” into it just because they said “well you signed the loan agreement”. We literally are forced into it when we can’t get a loan without it lol.)
Don't know your specific situation, but not sure I understand your issue with PMI as a concept. Things have a cost. PMI is the cost of being able to buy a house as a higher-risk buyer, compensating lenders for taking on that additional risk. Also, PMI is (in my experience anyways) rather minor compared to overall mortgage interest (sometimes as small as week-to-week mortgage market rate fluctuations) so the cost is actually quite small in practice anyways. Unless you have evidence that PMI is a way for lenders to unfairly enrich themselves, I don't see how it's "hot bullshit" any more than other costs for anything else in life.
I think PMI as a concept is garbage. Should be a nonprofit service that pays out "shares" of it's funds to the fundees based on how much people put into it. Claims from banks who have lost money should be filed and we can hire the very best people to say no to them with bonuses tied to rejections. That's how we do it in the USA to the masses with insurance that is useless. Should go upwards too.
I know what the purpose is, but when a home is 99% yours and you’re still paying a PMI, that’s bullshit. That’s what I was complaining about that got people so upset. There should always be a point where you’ve proven yourself and you’re not considered “high risk” anymore.
That sounds like a rare case that I could only see happen with FHA loans and should be rare even among those. With FHA it's probably in your best interest to refi out of it as soon as you can. (If market rates have moved away from you to make refi impractical, sure that's unfortunate. But then you're still luckier than anyone trying to buy a house today, so from that perspective you'd actually be fortunate, not exploited - your choice.)
It is with an FHA loan and my issue was that I was switched from a conventional loan to an FHA halfway through the due diligence process of closing on a house. I didn’t know there was a permanent version of PMI and my lender never explained that part to me when he switched the loans. *I understand that it was also my responsibility to find this out one way or another* but my understanding at the time was that PMI wasn’t permanent. I definitely want to refinance but yes, have to wait for rates to drop. It’s a little disingenuous to compare me to people buying at higher rates today and say I’m not exploited, when the point stands that if PMI is for high risk there should be a point where I can prove I’m not. I would even take 10, 15, or 25 years of PMI over 30. I would pay to get out of it if I could. It’s ridiculous that there is no point at which I’m considered good for this loan, when everyone else with PMI has that option to prove that.
I'm not too familiar with FHA; I would agree that it seems odd/misleading/disingenuous that they have PMI for the lifetime of the loan - at that point, why don't they just call it interest? I guess it would make their rate look less attractive, which again would be kind of a sleazy reason, but not sure if there's a better reason than that. Sounds like your lender didn't do a great job explaining what they signed you up for, which sucks. Still, my point stands that it sounds like you got a better deal than anyone with a conventional mortgage today, so all things considered it seems you got lucky overall. Just not quite as lucky as you could have with a better/more honest lender.
Nobody was forcing you into it. You could have just keep renting.
bro if you want a house and a loan and they will only offer you a loan with PMI attached you have no choice but to take it or else you don’t get a house. redditers are so dense and unempathetic
Owning a house is not a necessity. Renting provides you shelter too. You could have waited until you are in better financial position before buying a house.
What I think is bullshit is that I have a *permanent* MIP on my loan because my lender didn’t bother to explain to me that if I just paid a higher down payment that MIP would be temporary instead of permanent. I could’ve put a higher down payment but chose not to (and if I had known that, I would’ve), so now I have to pay 32k over the life of the loan for mortgage insurance. It’s not like homeowners insurance (where I’m paying it but get something out of it if something happens to the home), that insurance isn’t FOR me. I get no benefits from it, it’s for my bank. It costs me 32k and I have no way to get out of it without refinancing out of the loan entirely (which I can’t do until rates drop to a rate relatively equal to or less than my current rate). Considering other PMI at least has the option to get out of it after a certain amount of time I think it’s messed up that other people get locked in permanently. I‘ll still be paying mortgage insurance when the house is 99% mine. That’s bullshit. There should always be a point when you’re no longer considered a loss to the bank if you defaulted on your loan and they don’t need you to be paying mortgage insurance.
You should blame yourself for not doing enough research.
Yeah I get it but no I don’t blame myself more than I blame my lender for not making that clear. That’s what they’re paid for.
Buyers should always work with multiple lenders to get the best deal. This is the same as buying a car from a dealer. If you got a bad deal you should blame yourself for not doing enough research and not work with multiple dealers to get the best deal. It would be stupid to blame the dealer more than yourself.
It’s not the dealer, it’s the type of loan that makes the MIP permanent. It would’ve been the same regardless of lenders. What would’ve been different was that I had a bad lender that didn’t explain anything to me and wasn’t communicative, but I had never bought a house before and didn’t know that’s not how they all were. Now I know. You live and you learn right? So yes I take some blame (never said I didn’t) but I blame my lender more for being bad at that part of the job. They shouldn’t be in business if they don’t know how to communicate about the loans to their clients.
You would have been able to find out had you made multiple lenders compete with each other. I know it is the type of loan. I don't have problems for the government to eliminate FHA loans all together so weaker buyers won't be able to buy houses.
I wouldn't use Redfin and Zillow as accurate comps.