PMI decision making has thrown more than one mortgage process into a tailspin. Normal time frame for the private mortgage insurance approval varies. Rule of thumb is 24 to 48 hours. But with complications, mortgage insurance companies could take days and even weeks, as Tabitha in Bristol, TN discovered. So what action can she take, she asks me.
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By Tabitha in Bristol, TN
Ask Kate about mortgage insurance approval: We got mortgage approval through our bank over 4 weeks ago, got the house inspected and appraised, and have been waiting since then for the PMI approval to come back. We have the required 5 percent downpayment for a loan amount of $114,000
We want a 30 year fixed conventional loan and both have decent to good credit. My FICO is 760 and my husband's is 735. The market we live in isn't in one of the high risk areas and hasn't really had an excessive slowdown since the housing issues arose last fall.
We have provided all documentation as soon as requested and are still waiting.
The PMI company came back 7 days ago and wanted comparable houses in the area that have not sold in the past 6 months. Our lender has sent over 15 houses. Is this a normal part of the process and how long should the mortgage approval take?
Our contract on the house we are buying runs out soon and we have already been told by the seller they have a 2nd contract waiting. Is there anything we can do to speed up the PMI process?
Mortgage insurance companies insure lenders when home buyers want a low down payment mortgage or homeowners are refinancing with less than 20 percent equity. PMI companies are cautious due to their risk and can take their time granting PMI approval.
But for consumers buying a house or refinancing a mortgage, this is little consolation when time is running out.
Here is the reality. Squeaky wheels get the grease.
If you are caught waiting for PMI approval while your purchase and sale contract is about to expire, politely call your lender daily for status updates. If that is ineffectual, take it up a notch and contact the department superviser.
Keep notes based on conversations, including dates, names, and phone numbers so that you can write a factual letter to the mortgage company if circumstances do not improve. Putting concerns and complaints in writing are harder to ignore.
Any borrower with less than 20 percent equity should take into consideration when locking in an interest rate that mortgage insurance companies can slow down the loan process.
Monitoring your lock-in period when PMI approval drags on is a must. Ask your lender to extend the mortgage lock's expiration date if necessary.
I have mentioned it already but will say it again. The squeaky wheel gets the grease. Keep in touch daily with your mortgage lender until there's been a PMI decision.
Are you wishing for more basics on PMI? Visit What is PMI for answers.
What if you could ask a mortgage insider anything you wanted regarding refinancing or buying a house? Now you can!
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