How to stop Mortgage Insurance | Scottsdale Realtor | Karl Isenburg 480-788-7643
Karl: Here there it’s Karl Isenburg here with MyHomeGroup
and I’m here with my friend J.T.. We’re having coffee JT: It’s so good to see you buddy. It’s good
to see this rock star real estate agent Karl: and Rockstar lender. We were just talking
about I have so many clients that are their calling me and saying
gosh the market’s blowing up and I’ve got this mortgage insurance.
I don’t like it. I want to get rid of it and
I’m like oh call your lender. Well you told me something a little bit different which was
really spot on. Somebody’s gotten a loan but they’ve got mortgage insurance. The market’s
appreciated so now the amount of money they owe to their value of
their home. That’s called what? Loan to Value right.. So their loan
to value they think is pretty good. They probably asked me for a market analysis
and I said hey you’ve got this percentage of equity what percentage do you
need really to get rid of MI? JT: So to existing lender you may want to look and talk to
Karl first to find out what the value of the home is. But you may want to look at finding
out if you can just drop the mortgage insurance in general without having
to do a refinance. Karl: So I can get rid of it without refinancing. JT: You do not have to refinance in order
to get rid of mortgage insurance. The existing servicing company has
to basically order an appraisal. Which you want to talk to you first before
we have them do that because you want to be at 78 percent or less of value. Karl: So servicing company, is the servicing
company the person that my client got the loan from the person? JT: Good question. So servicing company
whoever you are mailing your payments to because most loans get sold.
So I made the loan at Fairway Mortgage… company plug
Well done JT Gotta throw that in there. However sell
all our loans to three or four different servicing companies. So it’s
the person you make your payments to. What I suggest Karl is to start with
you to get an idea of what the value is. Then they call me and send
me a copy of their mortgage statement. I’ll let them know. Look either call the
person you’re mailing payments to find out what the process is to drop MI
or we’ll say hey you know what it might make sense to refinance because you could lower
your rate lower your payment and get rid of mortgage insurance. Karl: So what. When I look at if
I have an interest rate of 5 percent And interest rates on average of course
it all depends on the person. Our averages are about
what right now. Today? JT: You’re in the high 3s low 4s depending
on loan type and credit score. Karl: And so then how how do you know when
the right time is.. you do the analysis of course but from
a layman’s point of view. If I’m just looking at a spread when
the interest when I hear about interest rates are X and my interest rate is
at Y. What’s that spread that I should be picking up the phone? JT: It’s usually at least
a quarter point or more. Karl: Oh that’s all? JT: Yeah, usually it depends on how long
they’re going to be in that house. So what’s the payback in terms of costs.
You know two or three grand in fees to refinance it. Then how well.
What’s the savings that I’m getting. And how long am I
going to be in that house Karl: If I’m moving to New
Zealand next month. Why do it? JT: Why do it but if easily the paybacks.
You know anywhere from a year to a year and a half depending on the
mortgage amount and savings. So we’ll do a free total cost analysis for them and let
them know doest it make sense or not. Awesome. Karl: Well thanks for our coffee
with JT. You have a fantastic day.