So, a HuntWA member came to me with a good-sized loan opportunity. He'd had a conventional loan for a year and was paying PMI (private mortgage insurance). When you take out a loan with PMI, you pay the premium monthly for a minimum of two years. If your equity brings you below 78%, your PMI drops off at that point. At 80%, balance to value, you can request removal of the PMI and normally, you'll get it removed.
He didn't want cash-out, just rate and term so the equity he's built over the last year would eliminate the PMI. When we started the loan, the difference in rate made a respectable difference in his monthly payment and the PMI was about $200/mo, so he stood to save a lot on his payment. However, the rate went up to within 1/4% of where his is with his present loan. At that point, I took another look at the loan savings v. his paying PMI for another year (this was after he'd jumped through the hoops and sent me all of his docs - great guy and responsive borrower) and it didn't pencil out. His closing costs where slightly higher than it would cost for an additional year of PMI. I called and advised him at that time to cancel the process as it was in his best interest and he did.
I care about my friends and my reputation on this forum. I will always strive to do the right thing for you even if it means turning my back on a big payday. Integrity and ethics are my ultimate goal, whether hunting, in relationships, or in my business. I don't know everything about mortgages, but what I don't know, I'll tell you and then find out. One thing I do know: I sleep well each night. Thanks for the opportunity, Cory. It was a pleasure working with you
