Is $860.00 PMI per month normal?

Question

My boyfriend in Maryland has been paying $860.00 per month in PMI on a $260,000 mortgage!! This is just for PMI, and does not include mortgage or other escrow payments. His credit wasn't so good at the time he purchased the house and he had $0.00 for a downpayment. But, still we did some research and found out most people pay less than $300.00 per month on $300k mortgage with zero downpayment!

Is there a way to reduce this without refinancing or waiting until he has 20% equity? He can't refinance now because the house values are going down in the current market.

Answer 1

It is far from normal.

I guess if he had real bad credit and no downpayment they charge more. I have never heard of such a high PMI amount

Answer 2

in his case there is little that can be done as PMI is risk=k based. You said his credit wasn't so good so he was probably a level 4 when he did his note and they do not even do these risk based level any longer. If he has been in the property for 12 months then he might get an FHA lender to look at it as he may squeak by and get it greatly reduced

I am a mortgage banker in TN & KY

Answer 3

$860 for PMI on the loan amount  you stated is not like to be true. Are you sure , that you not paying second mortgage since you take 100% financing ? Please check again your documents from the closing - check how many NOTE(S) you have in the package or go back to your lender ( broker) to check it for you, because there is mistake if this is really your PMI.

Answer 4

When I first saw the $860, I thought it was outrageous.  However, with -0- down and bad credit, I think I know why his PMI is so high.  Unless he is able to refinance, I don't see what else he could do except wait until he was 20% equity.  Unfortunately, with -0- down, that will be a very long time.