I am paying PMI on one of my houses because I wanted to take the downpayment money to do renovations. Can I get any lisenced appraiser to find the new value of the house now that its done? Can I just take that to the bank and request PMI be dropped ?( its a local bank I always deal with ) not an out of town lender.
( assuming that the appraisal shows that I owe less than 80% of the value?)
I'm quite sure of that, we added another bathroom, another bedroom, and all new walls, carpet, and fixtures. it was a total gut job,
I just dont want to drop a grand on a new appraisal if the bank can reject it.
( yes I called the bank and they wont give me a straight answer ) they keep saying call OUR appraiser and have him look at it,
"funny how the banks appraisers always seems to think your property is worth EXACTLY what you borrow"
Thanks in advance,
I am in MI by the way.
2006-12-21 01:24:31 · 5 answers · asked by fighterace26 3 in Business & Finance ➔ Renting & Real Estate
First off, check your loan agreement.
You were given a document that showed when it would be eligible to be dropped based on the loan's declining balance. It also explained your right to petition for removal of the PMI earlier than that date. Normally the loan must age for 2 or 3 years before the lender will consider an early removal and if that's the case it will say so.
You'll need to get the formal appraisal first, and then ask to have PMI dropped using that as a basis for your request. There's simply no way around that.
Just find out what the bank's requirements are for appraisers. Some have a list of approved local appraisers while others only require state certification.
2006-12-21 01:49:23 · answer #1 · answered by Bostonian In MO 7 · 2⤊ 0⤋
First of all, Boo's mom, the Private Mortgage Insurance payments are paid to the Private Mortgage Insurance company, not to the lender. It is just like any other type of insurance.
Most lenders will require a new appraisal of the property to be completed by one of their approved appraisers. If you have made significant improvements to the property, the previous responder's time element may be irrelevant. Most lenders will allow you to waive the PMI if the new appraised value is at 75% LTV or lower (they need a 5% cushion against depreciating market conditions to protect them from default to the investor if you default on payments and they have to foreclose after waiving the PMI).
The reason most appraisals come in at the sales price is because that is what the appraiser is required to justify too so unless the property is worth significantly more or less, it is what you will usually see. There is also the fact that the Realtor who listed the property did a lot of homework to determine the value before setting a sales price and advising the seller on the accepted offer.
2006-12-21 10:41:01 · answer #2 · answered by mazziatplay 5 · 1⤊ 1⤋
I've done this before. It is best to use the banks appraiser because the bank trusts his/her judgement and has probably used them for years. The bank doesn't know for sure if the other appraiser is a buddy of yours and willing to up the value just to save you money, or is actually being honest. If you use the banks appraiser, they will have no option but to accept their word on the value. An option to consider is having your local government who is responsible for assessment of property taxes, come out and re-assess your house for taxes. Yes, they will probably go up, but if they say that your house is worth X amount, and it is at least 125% of what you owe, the bank will still have you pay for their appraiser to come out and determine the value. Lots of run around, but usually it pays off if you have made improvements to the property and property values usually go up. Good luck.
2006-12-21 09:40:09 · answer #3 · answered by night worker 2 · 0⤊ 0⤋
The easiest way to get rid of PMI especialy when you know you have equity is call you're mortgage company that the home is financed through and ask them to do a streamline refinance. They will cantact a local appraiser and do a in-house refinance. You might even get a better rate depending on when you first got the financing.
2006-12-21 12:02:10 · answer #4 · answered by nvmyhomeloan 1 · 0⤊ 0⤋
It may depend on your loan terms. Some loans have a minimum # of years before PMI can be removed, regardless of the principal paid off. Some banks require 60% of the LTV (loan to value), meaning that the loan can be no more than 60% of the total value. And some loans require PMI for the duration of the loan.
At any rate, most banks are reluctant to remove PMI, as it is pure income for them. You may have to refinance it.
Good luck!
2006-12-21 09:34:53 · answer #5 · answered by boo's mom 6 · 0⤊ 0⤋