My home is appraised for more than the loan amount, do I still need PMI?

Question

The loan is for $155,000, but the house is appraised for $175,000, how do i get rid of PMI at closing?

Answer 1

To avoid PMI, your loan would have to be for 80% or less of the home's value. In your case, the home would have to appraise for 193,750 or higher to eliminate PMI.

Your other option would be to have a higher down payment. If you can put another 15,000 down on your loan, you will avoid PMI and have a lower monthly payment.

You do not have to refinance your home later to eliminate PMI. When your home value is above 193,750 you can request the mortgage holder to re-appraise your home.

There are some loan products out there that will eliminate PMI for a small interest rate increase over the life of the loan. These can be great deals if you only plan on living in a house for a few years.

Answer 2

If your down payment is less than 20 percent of the appraised value or sale price then you must get PMI - Put more than 20 Percent down on the loan, or get a VHA or VA loan.. The PMI is insurance to protect the Lender on the loan amount. Your PMI can also be cancelled when you reach 22 Percent Equity, if your payments have been on time.
Doing the Two loans can be brutal, because you will find that the 2nd loan is generally going to have higher interest, and it will be for an extended amount of time.

Every Month pay a little more to the loan and if you can split the payments to twice a mth.. apply the extra money to the Equity not to the interest, and you will be able to help get rid of it sooner. Also will reduce the number of years on your loan

Answer 3

If the home is appraised at $175k, the magic number on the mortgage is $140k. Since your mortgage is more than that, you're stuck with the PMI until your equity exceeds 20%.

While you could get a second as someone else has suggested, you must consider the higher interest rate of the 2nd mortgage AND any future variable rate features on that 2nd. Compare the TOTAL cost of going that route and see if PMI might just be the better deal; it often is.

Answer 4

Good Morning, you are currently at a 88% loan to value or LTV. Anything over 80% requires PMI...The only 3 way around this is to 1) go into 2 loans (80% 1st and 8% 2nd) OR 2) go into a subprime loan which are 2 yr fixed loans and have horribly high interest rates OR 3) go into FHA loan with a low 30 yr fixed rate but it also carries PMI but the rates are incredible around 6.25-6.5% all one loan with any credit score....Feel free to email me with questions or concerns after looking at my profile....Keep in mind PMI is now tax deductible.....QFM....be carefull of thinking you can get a new appraisal and your PMI will go away, lenders are very specific on this as most(largest lender in the country) do not allow this, you will have to refi to get out of it....for example Countrywide, Chase, WAMU, Wells Fargo, and many and most will not allow this, mainly due to the amount of appraisal fraud out there, check with the lender via phone call or ask your broker who he is taking you to and call that lender....QFM

Answer 5

that is in step with revenues fee or appraised fee whichever is far less.. on your case $260k x 80% could be a private loan volume of $208,000 or much less to circumvent PMI. all of us who replied in any different case is erroneous. We lenders evaluate the fee of the domicile for the 1st twelve months of possession with the aid of fact the lesser of the two. you're quite putting 10% down, not 20%.

Answer 6

Have a down payment of at least $15,000. PMI is generally required for loans for more than 80% of the home's value. Also, you could get a 1st mortgage for 140k and a second for 15k.

Answer 7

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