We bought a house 6 months ago and would like to figure out a way to get rid of our pmi, do you have any insight on that? I've read a refi can help but we might need to wait 2 years? We are at 12% equity at our purchase price , although zillow says its worth 40k more now..
You normally have to wait two years if you want the PMI to fall off a conventional loan (assuming loan-to-value is 78-80%) without having to refi. I recently rejected a HuntWA member's refi that would've made me a lot of money because he only had a year left before the PMI would fall off on its own and he would pay less in PMI than in closing costs.
Depending on what kind of loan you have. If you have FHA, they don't base the loan to value for dropping PMI. They use the pay-off (or current loan balance) v the original loan amount, which normally takes about 11.5 years with normal payments to get below 78%.
Conventional and jumbo refi with cash out - You have to have made 6 on-time payments (depends on lender and whether you can stay with that lender and refi that soon). Remember that you pay closing costs each time you get a new mortgage. They can hide it in a higher rate or you can take out a bigger loan to cover them. One other thing to remember is that if you used Down Payment Assistance (DPA), when you refi in under 5 years, all or some of that DPA comes due out of the cash you receive (it usually falls by 20% per 12-payment year depending on the DPA program you used).
