Primary Mortgage Insurance (PMI)

I put a little over $3,000 down on my $102,000 house. I was approved for a FHA loan. Because I put less than 20% down on the home I had to have Primary Mortgage Insurance or PMI. My home is now worth $123,996(according to http://www.zillow.com/) and I owe $99,000. Since I owe less than 80% of my home's value, I should be able to cancel the $40 a month PMI. So, I went to the following websites to see how I could cancel my PMI:

1. http://www.frbsf.org/publications/consumer/pmi.html#cancel
2. http://moneygirl.qdnow.com/2007/07/03/how-to-get-rid-of-pmi.aspx

According to Money Girl (#2), I can't cancel PMI for a FHA loan:

These rules for canceling PMI do not apply to FHA or VA loans, high-risk
loans, or loans with lender-paid PMI

According to #1:

Under HPA, mortgage lenders or servicers must automatically cancel PMI
coverage on most loans, once you pay down your mortgage to 78 percent of the
value if you are current on your loan. If the loan is delinquent on the date of
automatic termination, the lender must terminate the coverage as soon thereafter
as the loan becomes current. Lenders must terminate the coverage within 30 days
of cancellation or the automatic termination date, and are not permitted to
require PMI premiums after this date. Any unearned premiums must be returned to you within 45 days of the cancellation or termination date.

For high risk loans, mortgage lenders or servicers are required to automatically cancel PMI coverage once the mortgage is paid down to 77 percent of the original value of the property, provided you are current on your loan.

I'm not sure if my FHA loan is a high risk loan, so I'll look over my paper work and see if there is anything about PMI termination and then call my mortgage company.

As a side note: Money Girl has a great podcast and website.

Home Equity Lines of Credit

I finally left my little bank that i've have been a member of since I was in high school. I left it for Chase because I got $100 free and the conversion was fairly simple. Although, I still have to change a few of my direct deposits. But all in all I'm glad I did it because I can access Chase from Yodlee, my online money manager. Well, while I was opening the account the rep asked if I wanted to open an home equity line of credit (HELOC). I said yes because I knew it would raise my credit score. More on why it would increase my score later. So, I applied and I was approved at an interest rate of 12% with a credit score of 660. Hmmm, I thought it was kinda high but didn't say anything.

I close on Saturday and in the back of my head my imaginary Single Ma has been telling me that I need to shop around. I'm a procrastinator but Midfirst is giving away $100 with a HELOC. OOh, so free money got me moving and I called a rep. The rep told me that with a credit score of 660 I should have a 9.5% interest rate. Hmmm, that is much better than 12%. I don't plan to ever use it but just incase, I need it lower.

I like Chase so I am going to see if they can do a counter offer. But I am getting ahead of myself. The rep could be wrong about the interest rate and it may be higher.

By the way HELOC interest rates can increase or decrease over time. Chase offered me 4% over the prime interest rate. Midfirst was talking about 1.5% over the prime interest rate.

I'll also need to compare the fees?
Do I have the option of paying interest only?
The yearly fees?
Am I charged a yearly fee if i don't use it?
How long must I keep it open to avoid a fee?