Refinance question

[Anonymous]

Good morning,

First I'd like to thank everyone who posts on this forum.  My wife and I used the advice that we've read from everyone to recover from major medical bills and job loss that required us to short sell our house in 2005 and move to a different city.  We purchased a new home in October 2010 , with 3.5% down on an FHA loan.

My question today is:  The home we purchased was on the market for 14 months (previous owner passed away and the bank took it back).  We purchased for slightly less than appraised value (239K purchase, 246 appraised).  Our broker and lender both told us that the value of the house would be considerably higher after some minor repairs and the house being lived in.  I'm wondering whether it's a good idea to think about getting re-appraised in the spring to see if we could refinance the loan and get rid of the PMI.

Thanks for any advice!

[ShanetheMortgageMan]

Congrats on your score improvement and buying a home.

When you get an appraisal on a refinance, your home's value will be compared to other similar homes that have sold within the last 3 months from when the appraisal is done.  What I normally do is call up the homeowners real estate agent and ask them to pull recent comparables to find out if the value we'd need is going to be supported.

Even though Fannie Mae & Freddie Mac will permit you to use the current appraised value on a refinance (no waiting required), a lot of lenders require you to have owned the home for 12 months before they'll accept a value that is higher than the purchase price... so be sure you have a lender that will allow the new appraised value to be used within 12 months.