pmi

[Anonymous]

a off the subject question for anyone who can help.

i pay 97.00 a month in pmi insurance,  my uderstanding is, when my loan reaches 80% of the ORIGINAL

loan appraisal, i can cancel the pmi.

when i called a few years ago to cancel my pmi, my home had gone up in value and that is what i was told.

when i call them in a few  months to cancel my pmi ( i will be at 75% L/T on original appraisal) i figure they are going to give me the run around and say it is based off the value now.

so just looking for the correct answer and/or where to find it.

if it helps i have a freddie mac, convential, 30 year fixed with pmi.

[ronq]

You will probably need a new apprasial since the housing market has tanked the last few years. Even if your market hasn't declined as much as some places. It might be worth it since you could recover it in 3 or 4 months with what you pay in PMI. It shouldn't be as dificult as some lenders make it, but some are really a pain when you want to cancel PMI.

[Anonymous]

well thats the problem, when i bought the house it appraised for 175k

and now it would appraised at 140 give or take.

in 3 or 4 months i will owe about 139k which is 79% of the oringal appraisel.

[Anonymous]

I think the rule is that you have to have 80% equity, not that the loan is paid down to 80% balance.  As far as the intial comment about when values were up, banks will not drop the PMi until you have paid down 20% of the loan.  At that point (when 20% of the loan has been paid down) you can check your equity to see if you can get the PMI removed.  Either way the bank is not going to remove PMI until 2 things happen, the loan is AT 80% original principle and the home's equity stands at 20%. 

That is how it was explained to me and I am sure tha banks are even more strict about removing the PMI now.  I would be very curious if this is really the case though.  Hopefully someone will answer.

[ronq]

I don't know. I think the lender will want an appraisal before they drop PMI since home values have been declining. Maybe Dallas or Shane will have more insight.

[wajj]

Looking at my current application (in progress -- cross your fingers), it says that the PMI comes off when I have paid down to 80% of the appraised value when I bought the house.  So, appreciation will not help me any -- I'm stuck with 10 years of PMI

[DallasLoanGuy]

Every lender has their own policy. And policies can change.

It is likely that they will do a quick AVM(Automated Valuation Model.... kind of like pulling comps) to see if they are still ok after you pay the loan down below 80% or 78% or whatever their policy is these days.

If you are in a declining market, you might be screwed.

Maybe do some more research on your specific servicer or see if this is spelled out anywhere in your documentation. <= for backup

[NH_CarDealer]

MIne was 2 things:

Loan to 80% of original borrowed amount.....

5yrs of payments....paid and never late.

Then the PMI can come off.

[beb86]

+1 mine is what ever comes first