I want to get rid of my PMI.?

Question

I think I can do this because I built my house myself and believe that it is worth much more than I paid for it. Can I get an appraisal and if I have 20% equity, does my PMI automatically cancel? I have a interest only loan and put 5% down through Quicken loans.

Answer 1

It varies from state to state. Don't pay for an appraiser yet.

The first thing you want to do is check how much equivalent properties are selling for in the area immediately around your property - within half a mile if you're in an urban area. Keep it to numerical details like same number of square feet, number of bedrooms and bathrooms, size of lot, etcetera. Appraisers love objective measurements like price per square foot. And we're not talking asking price, we are talking actual sales - willing buyers and willing sellers in arms length transactions that have actually been consummated. Avoid giving yourself extra for all the little extras most homeowners are proud of (and perhaps justifiably so), but will never be able to sell for as much extra as they think.

If the number you get means it's not even close, approach the lender. Considering the state of the market in most of the country right now, expect some skepticism. Be courteous, but firm. These are, after all, verifiable sales of similar property. Show them your data.

If it's even kind of close, in most states the bank does have the right to require an appraisal. They do not have the right to require that you use their appraiser in any state that I'm aware of. It's usually no big deal for a licensed appraiser to get approved with a given lender. You do not want to use a bank employee, who's going to be told to minimize the appraisal.

Do not require an appraiser to hit a given amount as a condition of getting your business. That's a federal no-no.

One more thing to consider: If you've got better equity now than previously, it may be worthwhile to refinance, rendering this whole appraiser game moot.

(here's an article that covers that issue: http://www.danmelson.com/2006/11/how-soon-after-you-purchase-a.html)

Answer 2

I HATE PMI!!!!! This is the biggest rip-off in the mortgage industry, but most people can't buy a home without it.

If you have 20% equity in your home, you can request that the mortgage company remove the PMI, and they will have to comply. The problem is proving that you have 20% equity in your home. You will likely have to have an appraisal done and that will cost approximately $350 to $500, but considering that PMI can be $150 or more monthly, it is worth the expense.

Find an appraiser that will work with you to give you the maximum value on the appraisal. Send a copy to the mortgage company, and tell the PMI company to go jump in a lake.

Answer 3

Check your contract for the PMI cutoff. Sometimes it is higher. Also, the bank will want the appraisal in their name, not yours, so go to them before you have it done. Finally, if you have sufficient equity, you will have to call advise your lender to remove it because they will not just do it on their own.

Answer 4

PMI is in until you have paid 20% of the loan .
Interest only means you will NEVER get there ,
What goofball sold you that ?
But try a home inspection first then the appraisal .

You built it yourself ? to code ? in all the apsects of electrical , plumbing , structural etc ?
Congrats ! Maybe the appraisel will f ly !

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Answer 5

PMI does not automatically cancel. You haveto write the bank with the apprasial to cancel it. Expect a bit of a fight if you are close