Get a HELOC for this?

**chatterweb** · 05-20-2007, 05:54 PM

We own a rental and have PMI and escrow account.

I was thinking of getting a HELOC on our primary to pay down our mortgage on the rental so the PMI is removed.

I would need to borrow 19000.00.

Otherwise, the PMI will exist until 2013 and we will have paid close to 11000.00 in PMI.

Any thoughts??

**banana** · 05-20-2007, 08:25 PM

Are you sure you will have to pay PMI for that long? I know when we paid our house they told us we had to pay PMI for x amount of years. I called them after 2 years since the real estate went up a bit in my area. The mortgage co said for me to pay for an apprasial and if it was appraised for a certain amount (which would give us 20% equity) then they would remove the PMI. Well we did just that! Before we hired the apprasier we called up a few realtors to see what the "market rate" would be for our house, when we thought it was enough to cover the 20% equity we had the apprasial done.

**rosebron** · 05-21-2007, 12:10 AM

If you are in a position to accelerate your principal payment to your rental property using cash flow to reduce your LTV sooner. Then I would refi.

I would do that versus a HELOC from your primary residence.
Thing is, you might not hold onto the rental for that long if an great opportunity to sell, exchange, etc.comes by.
Plus, I believe in separating business business from home business.

**chatterweb** · 05-21-2007, 01:37 AM

I am waiting for a few FMV quotes from local realtors.

Then I will order an appraisal through Penfed...

I agree it makes more sense to refinance, even if I pay
.125 more in interest.

I just cannot justify paying $1466.00 a month on a loan of $180000.00.

The taxes and insurance work out to 107.00 per month.

**chatterweb** · 05-26-2007, 05:45 PM

Originally Posted by banana

Are you sure you will have to pay PMI for that long? I know when we paid our house they told us we had to pay PMI for x amount of years. I called them after 2 years since the real estate went up a bit in my area. The mortgage co said for me to pay for an apprasial and if it was appraised for a certain amount (which would give us 20% equity) then they would remove the PMI. Well we did just that! Before we hired the apprasier we called up a few realtors to see what the "market rate" would be for our house, when we thought it was enough to cover the 20% equity we had the apprasial done.

We will have PMI until 2013. I got a limited desktop appraisal (for free!)

The value is 200,000 high and 179000 low.
Values are still declining too.
We owe 180000.00.
Too risky to try to refinance now.
Also, we would have a new loan amount of 190000.00
with a higher payment.
Today,
I got free advice from a mortgage consultant through a local am radio station!

He suggested getting a HELOC on our primary, and using that money to pay down the principal to get the PMI removed and the escrow account removed.

I also called the current lender and the amount to remove PMI is $16000.00 and not $19000.00

So, instead of paying $1466.00 per month we will pay $1103.00 each month for the mortgage on the rental.

Another perk is the bank I am getting the Heloc from has a
3 month intro rate of 1 percent.

So, I am going to make some interest off the Heloc money for those 3 months!
I am satisfied with this decision, for me, I hate PMI and the HELOC will cost less each month to repay than the PMI.

**chatterweb** · 05-30-2007, 02:38 AM

Originally Posted by chatterweb

We will have PMI until 2013. I got a limited desktop appraisal (for free!)

The value is 200,000 high and 179000 low.
Values are still declining too.
We owe 180000.00.
Too risky to try to refinance now.
Also, we would have a new loan amount of 190000.00
with a higher payment.
Today,
I got free advice from a mortgage consultant through a local am radio station!

He suggested getting a HELOC on our primary, and using that money to pay down the principal to get the PMI removed and the escrow account removed.

I also called the current lender and the amount to remove PMI is $16000.00 and not $19000.00

So, instead of paying $1466.00 per month we will pay $1103.00 each month for the mortgage on the rental.

Another perk is the bank I am getting the Heloc from has a
3 month intro rate of 1 percent.

So, I am going to make some interest off the Heloc money for those 3 months!
I am satisfied with this decision, for me, I hate PMI and the HELOC will cost less each month to repay than the PMI.

Updated to say we are sitting tight.

No heloc and the credit cards will fund our dream...