Reduce PMI?

[UpNComing]

Has anyone had success with reducing PMI before 80% LTV?  I've also heard the vast majority of lenders remove it after 24 payments if requested.  Although with the recent changes in underwriting I'm not sure that is the case anymore.

[DallasLoanGuy]

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UpNComing wrote:

Has anyone had success with reducing PMI before 80% LTV?  I've also heard the vast majority of lenders remove it after 24 payments if requested.  Although with the recent changes in underwriting I'm not sure that is the case anymore.

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vast majority? i never heard that.

[Anonymous]

I received a letter from bank of america that I could request PMI removal after 24 months. As long as I have no late payment history and if my home value stayed same as it was appraised when I closed  or increase.  but I would have to pay for the apprisal.

[Imhotrodcrazy]

A current  market appraisal showing that you have at least 20% equity in your home needs to be done before they will delete the PMI.  Before you pay for an appraisal, be sure the appraiser you hire  is on your lenders "approved" appraisers  list.   I wouldn't  want to see you pay for an appraisal just to find out your lender won't accept it. 

[krielly]

So true! Check with your lender first, to see if they even allow it.

Wells Fargo will not remove PMI based upon an appraisal. The only ways to get rid of the PMI are:

Pay down the mortgage early to the required ratio

Wait until reaching the required ratio via your regular payments

Re-finance the mortgage

[MattH]

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@Imhotrodcrazy wrote:

A current  market appraisal showing that you have at least 20% equity in your home needs to be done before they will delete the PMI.  Before you pay for an appraisal, be sure the appraiser you hire  is on your lenders "approved" appraisers  list.   I wouldn't  want to see you pay for an appraisal just to find out your lender won't accept it. 

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I thought by law they had to remove PMI when the loan principal falls to 78% of original purchase price no matter what, no appraisal needed.  For the 80% LTV criterion the lender may require a new appraisal and also may refuse if it's been less than two years since purchase.  Certainly when my wife and I had paid ours down to 78% of original purchase price I was able to end PMI with a single phone call, I didn't even have to sign any paperwork.

[Imhotrodcrazy]

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@MattH wrote:

 

I thought by law they had to remove PMI when the loan principal falls to 78% of original purchase price no matter what, no appraisal needed.  For the 80% LTV criterion the lender may require a new appraisal and also may refuse if it's been less than two years since purchase.  Certainly when my wife and I had paid ours down to 78% of original purchase price I was able to end PMI with a single phone call, I didn't even have to sign any paperwork.

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MattH, 

If you were able to get your PMI canceled in today's down market with just a phone call, I say congrats to you.  With falling prices in most areas  I would be very surprised at a lender dropping PMI without a current appraisal.  I may be wrong here, but I am going by my many years as an appraiser.  Most lenders want to know the current LTV before making such a decision. 

[MattH]

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@Imhotrodcrazy wrote:

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@MattH wrote:

 

I thought by law they had to remove PMI when the loan principal falls to 78% of original purchase price no matter what, no appraisal needed.  For the 80% LTV criterion the lender may require a new appraisal and also may refuse if it's been less than two years since purchase.  Certainly when my wife and I had paid ours down to 78% of original purchase price I was able to end PMI with a single phone call, I didn't even have to sign any paperwork.

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MattH, 

If you were able to get your PMI canceled in today's down market with just a phone call, I say congrats to you.  With falling prices in most areas  I would be very surprised at a lender dropping PMI without a current appraisal.  I may be wrong here, but I am going by my many years as an appraiser.  Most lenders want to know the current LTV before making such a decision. 

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Well, from their own records they could see that the principal had been paid down to 78% of the original purchase price, and as I understand the law they don't have a choice when LTV reaches that point and are not allowed to require an appraisal.