Is my house ready for apprasial to get out of my PMI mortgage?

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I started your own business and needed cash to boot. I bought my house last year 209,000, but he was so underrated. A number of small houses in my neighoorhood sold about 230,000. The principal balance of my loan is 205,000. If I take a home equity loan for 40K and get your house rated at 250 K, while reducing my manager that I can eliminate the PMI and the roll of 200K, that money (and more) in my home loan pay. My mortgage company estimating a company home equity loan (this should be done outside the company). Also, the reason I installed as much information as I am also fishing for tips on this situation. Thank you for any input at all!

  1. Reply
    May 16, 2011 at 12:51 am

    When you have the equity appraisal done, you can also forward that information to the mortgage company, and specifically request that the PMI be rolled back, if not eliminated.

    As a general rule of thumb, PMI is required by most mortgage companies for the first 30% of the original loan value. So, at 209, your mortgage company is thinking you’ll be required to carry PMI until you’re at 146 or so. Doesn’t hurt to ask, though.

    Good thoughts on raising the capital – I like it. Good luck! – Stuart

  2. Reply
    May 16, 2011 at 1:49 am

    Mortgage companies don’t like to tell you and they sure as heck WILL NOT REMIND YOU that after 3 years, the PMI, if no late payments, and all in good standing, will be taken off if you send a letter to the company asking them to take it off and proof of no late payments. All you ever have to do is call and hopefully get a REAL LIVE PERSON, inform them its been 3 years and you want the PMI dropped. They will tell you exactly what to do, pretty much what I said above and that should be it. But you make sure that you talk to someone that really knows what you are talking about. Get their name, department, date, time of day that u call them, incase it doesn’t go through the 1st time. You will have proof. Always keep an extra copy of what u send them and when you send the letter and proof to them, send it where someone has to sign for it and you get a receipt back in the mail stating that they received your info. Keep it with your papers. Make sure you check to see if PMI has been taken off. Keep on top of it until it is. Good Luck!

  3. Reply
    May 16, 2011 at 1:56 am

    Not to contradict one of the other answers here, but PMI is applied when the first mortgage is over 80% loan to value (not 70%). In simple terms, if your home is worth $ 100,000 and your first mortgage is $ 80,000 or less, you should have no PMI.

    To have the PMI removed, there are some options. First, you should call the mortgage company and ask them whether or not they require a full appraisal (some companies only require a BPI – Broker’s Price Opinion, which should cost less than $ 100). If they do, ask them for a list of the approved appraisers in your area. You should then be able to go to your local lender for the HELOC (Home Equity Line Of Credit) and ask that lender to use one of the appraisers on the list.

    Another option would be to ask your lender to have the appraisal done (then they can remove your PMI), and then go to your lender with that appraisal. If the appraiser who does the job is on their list, it should be easily usable.

    Third option, but probably most expensive, would be to go to your lender (with your current loan information) and ask what benefits there are for you refinance. This could work to your benefit if you either have a higher interest rate (your rate will go down on the first mortgage with a lower loan to value ration) or if you have an ARM (Adjustable Rate Mortgage) that will be adjusting soon.

    Most importantly, don’t forget that the HELOC or second mortgage you get will have a higher interest rate. In most cases, though, it’s a small bit higher for total payments than your first mortgage plus your PMI. You make up for this with the interest deductions you can take on the second at the end of the year. Make sure you ask your accountant or CPA first to get all of the details on this.

    Best of luck to you – you seem to have your ducks in a row, and your plan should work well for you.


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