Did the PMI requirement lower recently for banks to combat rates?

Question

Hi all!

I heard through the grapevine that mortgage banks are starting to lower the PMI requirement to 10% instead of 20% in order to combat the rising interest rates...? Wondering if there is any validity to this rumor.

I purchased in Boerne, TX with 15% down 4 months ago on a SFH rental prop and would love to see if I can get my PMI removed.

Any information proving/disproving would be great! And if it is true, would love to find out the best way to approach my lender to get this approved.

Thanks everyone!

Brett Foley · Answer

Thanks Reid! I assumed it was just one-off lenders doing that but appreciate the Fannie/Freddie context. Still can't hurt to ask my lender!

Reid Chauvin · Answer

Hi @Brett Foley - I've heard of banks/depository institutions offering some programs recently that are 10% down with no MI, but these are not conventional (fannie/freddie) loans and the 'no PMI' doesn't automatically mean they are a better deal for you than a 10% down conventional loan with PMI. There's a good chance the rates are higher and there may be additional/higher fees on other line items than with a conventional loan.

Also, I do not think you are going to refinance into a better deal right now than you got into 4 months ago given the rise in interest rates. Not to mention the fees you'll pay for a refinance. I guess it doesn't hurt to ask your lender though and see what they say! I would definitely ask your lender how many more months you have of paying PMI before making any decisions to payoff the current loan.