Answering a question regarding HARP 2.0 and PMI

Dear Rhonda:

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?

Dear Reader:

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.