Question

Would love to get some insight from everyone here. I've been entertaining the idea of selling my house. We bought it back in 2016 and it was clearly a starter home for us (3/2, 1500 sqft). My husband and I live there full-time and his daughter (my step-daughter) is there every other weekend or so. The master is small, so my husband uses the "guest room" as his area and closet. We want to have a baby, but can't fit another person in this home. We looked into buying homes that are best suited for us, but since we won't be putting down 20%, we're looking at an extra $1000 payment on the mortgage. We talked and thought it would be better to maybe stay for another 2 years max and pay more towards the principle every month, so when we sell we have more equity. We are paying PMI on an FHA loan and that really just kills me. I want to get rid of it because i think we're way past 22% equity in our home now. Has anyone here successfully removed their PMI on an FHA loan and can share what you did?  

Answer 1

Yes we had it removed. We contacted our lender and had to pay for an appraisal. It appraised higher enough to remove the PMI and lower our payment. Call your lender and they will tell you what needs to be done. Good luck!  

Comments

Was your original loan an FHA or conventional?  

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@piceous1385 FHA it’s was our fist house and made it possible to buy and stop renting.  

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@toxicant good to know. I have to try that and see if my lender does the same. I’ve read that you can only get rid of PMI on an fha loan by refinancing.  

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@piceous1385 it never hurts to ask. My loan was a while ago. I guess their may have changed. Best to always call and ask. Worst they can say is no

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@toxicant like. before 2013?  

Answer 2

We removed our PMI years ago when we refinanced. We only had it for a couple years, not even. Refinance and make it work in that house for a bit longer. Instead of paying more toward the principle of a home you don't plan on ever fully paying off, I'd stack that money into your growing savings and in a couple years you'll be in a much better position to sell and buy, plus you won't be rushing to sell during this crazy time when things are super unpredictable.  

Comments

Liking the idea of just putting it into savings rather than into principle. would have though saving it in my interest bearing savings account would have come naturally, but sometimes i need help thinking, LOL

Answer 3

Refi the loan or request an appraisal - that you will have to pay for.  

Answer 4

My understand is that on an FHA loan, PMI is for the life of the loan. We did a refinance and that’s the way we got rid of PMI. The problem with refi is that you incur closing costs.  

Comments

@necrology8 so you refinanced with a conventional loan to get rid of the PMI?  

Answer 5

With current FHA rules you cannot get rid of your PMI without refinancing your loan.  

Answer 6

FHA loans are different than bank loans. The only way to get rid of PMI on an FHA loan is to refinance. If you're going to sell in 1-2 years, it's not worth it to refinance now.  

Comments

Would it not be worth it because of i'd have to pay closing costs to refi?  

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You don't pay as much as closing costs but the fees for refinancing can be $2, 000 or more.  

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@piceous1385 That's typically the train of thought. If you're gonna live there longer then you have time to recoop the closing costs.  

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Makes sense. Someone told me they were refinancing their house but we’re only living there for another year. However they were keeping the property to rent out. Not live in. So that makes sense.  

Answer 7

I refinanced after I had enough equity and got a lower rate, 15 year mortgage, and same payment.