I recently received this question from one of my readers:
I am looking for information about the general way loans are done related to primary residence or second home.
I currently own 2 duplexes. My wife and I are renting and working in a location that is around 130 miles away from the location the home we want to buy is located. My wife has no loans in her name and was able to qualify due to good credit and job at current location 130 miles from home we want to buy. We are trying to buy a place that is far from our work with the plans of moving to this location. [Read more…]
I currently pay PMI on my mortgage, if I refinance under HARP 2.0, after refinance, will the PMI still exists? Would the PMI premium be lower since the amount refinanced is lesser than the previous mortgage?
Yes, if you currently pay PMI on your HARP 2.0 eligible mortgage, you will also have private mortgage insurance in your new mortgage payment with your new refinanced mortgage. It will be based on the same coverage (percentage) amount as your existing pmi. So if your mortgage balance is lower, the monthly pmi payment may be slightly lower as well.
I recommend comparing your existing payment (PIMI) to the proposed new payment, factoring in when your existing PMI may drop off. If you’re within months from your existing pmi dropping off, it could be worth delaying refinancing, however, if t’s after December 2013 (when HARP 2.0 is currently scheduled to terminate) it’s probably in your favor to refinance now.
If your home is in Washington state, where I am licensed to originate, I’m happy to help you.