Buying Out PMI?

TripleShot · May 2012

Has anyone done this? How much did it cost? We're getting ready to close on a 5% down conventional construction loan and our PMI will be about $210/month. If its just a few thousand to buy it out, it might be worth it?

ETA: my loan officer just emailed me back and said its not an option on construction loans.

VMRRN23 · May 2012

We're doing a 5% conventional loan as well. We're paying an upfront PMI, but its being rolled into the mortgage by using a sellers credit. So instead of us paying the few hundred a month or the $13K up front, the 13K gets rolled into the mortgage amount through a seller credit. It's definately worth it to us. I'm not sure if every bank/credit union, etc offers this though, because it wasn't offered to us the first place we looked last year.

I say, if you can pay upfront and save the interest, go for it.

EastCoastBride · May 2012

We bought ours and it was about $2k, but the bank we got the mortgage through actually paid 1/2 of it. Long story - but a personal friend was helping us, and the appraisal was a TOTAL f-up and basically wrong, but these days, no one wanted to say 'boo' to it- so since it affected our loan, my friend got his company to pay 1/2 the PMI.

kaylie622 · May 2012

Usually they just charge you the full PMI that they expect you to pay by taking the monthly amount and multiplying it by the number of months that you're expected to pay it. If you can get a seller credit towards it like pp did, it's probably worth it. Otherwise, there's a chance you'll get the 20% equity sooner than expected and it could be a waste.

Buying Out PMI?

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