Q: We bought our home in 2005 with a no-down-payment loan that required private mortgage insurance. Since then, we have worked hard to make additional principal payments and have reduced our balance to about 70 percent of the current value. The loan papers say that we can have the PMI eliminated when the loan balance is less than 78 percent of the value of the home. Based on the original amortization schedule, that wasn’t supposed to happen until 2018. Our lender is saying that the PMI must be paid until then. Can we do anything about this? – David
A: Yes. Typically, a lender guards itself against a default by requiring the borrower to take out private mortgage insurance if the down payment is less than 20 percent. The Homeowners Protection Act is the federal law that applies to your situation. It states that your PMI payments will stop on the date disclosed to you when you made the loan – 2018. Because you made extra payments, you can apply to have the PMI removed. But you must be current on the loan and not have a second mortgage.
The request must be made in writing. Your lender can require you to provide evidence of the value of your home, so you likely will have to get an appraisal. Most homes bought in 2005 have dropped in value, so this is most likely the loophole that your lender is using to require the continued PMI payments. If you have made your request in writing and have been denied, I recommend that you look into refinancing your home. Current interest rates are slowly rising, but they’re still very good. You would not be required to pay PMI based on your current loan-to-value ratio.
Q: Several years ago, my building changed the rules and stopped allowing pets. Because I had my dog back then, I was grandfathered in and allowed to keep it. After it died, I got a new puppy to help me deal with my grief. Once the association found out, I started receiving violations and fines. I tried explaining to the manager that I was grandfathered in but was told that this only applied to my old pet. What can I do? – Dana
A: You may have to find a new home for the puppy, but there is one option you should try first.
As with any issue regarding community associations, review the governing documents and state law to be certain. And the rules can vary slightly depending on whether you have a condominium or homeowner’s association. When a community association decides to change a major rule, it will agree to allow existing unit owners that would be in violation of the new rule to be exempt.
For example, a condo that bans renters might allow an existing landlord to finish the lease with his tenant, but not allow a renewal of the lease or a new tenant. When your dog passed away, your grandfathered status ended and, just like your neighbors, you are not allowed to get a new pet.
But consider this: Because the dog is helping you deal with grief, look into the possibility of having your doctor certify that your pet is necessary for emotional reasons. Pet restrictions do not apply to service animals or therapy dogs.
Gary M. Singer is a Florida attorney and board-certified as an expert in real estate law by the Florida Bar. Send him questions online at http://sunsent.nl/mR20t7 or follow him on Twitter @GarySingerLaw.