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If your home value has increased you can usually ask/tell the lender you believe the value has increased enough that PMI should fall off and that you'd like/ar
by jrs235 5y ago
If your home value has increased you can usually ask/tell the lender you believe the value has increased enough that PMI should fall off and that you'd like/are willing to pay for an appraisal (typically a few hundred dollars). Or, if your loan is owned by Fannie/Freddie, you may not even need an appraisal if the new value/increase is within certain percent range. I know this because I spoke toy lender (a credit union) about getting an appraisal to remove PMI. Knowing the outstay loan amount was X I said of it appraises at X/.8 thenwe should be able to drop PMI. Lender called me back and said that X falls within Fannie/Freddie allowed range that an appraisal wasn't needed. This only works in a market where prices are increasing. Your mileage will vary depending on your lender.
- runako 5y ago> Your mileage will vary depending on your lender. This is why I raised the issue. Some big prominent lenders do not allow this practice. (IIRC Wells Fargo & BofA fall into this category; they hold roughly $600B of mortgages between them.) IMHO it's not something to bank on before purchase unless your lender is willing to write the specific terms into the mortgage. Reviewing the Fannie Mae requirements [1], it appears that you also need to either get to 75% LTV (not 80%) unless you have held the property for 5 years, so the 3-year timeout in the calculator is still not likely to be valid in many cases. (Also note the Fannie Mae requirements have changed in the last ~2 years and are subject to change going forward. I would not bank on this provision being exactly the same in 5 years.) 1 - https://servicing-guide.fanniemae.com/THE-SERVICING-GUIDE/Part-B-Escrow-Taxes-Assessments-and-Insurance/Chapter-B-8-Mortgage-Insurance/Section-B-8-1-Conventional-Mortgage-Insurance-Requirements/B-8-1-04-Termination-of-Conventional-Mortgage-Insurance/1040972451/B-8-1-04-Termination-of-Conventional-Mortgage-Insurance-05-15-2019.htm#Borrower-Initiated.20Termination.20of.20Conventional.20Mortgage.20Insurance.20Based.20on.20Current.20Value.20of.20the.20Property https://servicing-guide.fanniemae.com/THE-SERVICING-GUIDE/Pa...
- notwhereyouare 5y agoMine won't let me remove PMI early if value has risen until I have 2 years of payment history with them. I'm just looking at refinancing as it will be appraised that should remove PMI since we'll have more than 20% with the new value