I did a refi, and my appraisal came back lower than it should have. Does anyone have a recommendation on how to get rid of PMI besides just waiting until I pay enough principal to get rid of it? Can I pay for a new appraisal?
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Getting rid of PMI
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Last: 3 yr ago by hph6203
I'll share a past experience I had, but it's not 100% applicable to your situation.
I had PMI on my first home. As soon as it hit 79.9% LTV ratio, I called my lender and asked them to remove PMI. They told me that I had to pay for an appraiser of THEIR choice to come do an appraisal to verify that my LTV ratio was, in fact, less than 80%. It seemed to me that their hand picked appraiser may have an incentive to undervalue the home, so I didn't go through with it.
The lender is required to remove PMI at 78% LTV ratio. I did the math and the cost of the appriaisal was actually more than the amount I was paying in PMI between 80% to 78%, so I just waited a few more months and asked them to remove it once they were required to.
I had PMI on my first home. As soon as it hit 79.9% LTV ratio, I called my lender and asked them to remove PMI. They told me that I had to pay for an appraiser of THEIR choice to come do an appraisal to verify that my LTV ratio was, in fact, less than 80%. It seemed to me that their hand picked appraiser may have an incentive to undervalue the home, so I didn't go through with it.
The lender is required to remove PMI at 78% LTV ratio. I did the math and the cost of the appriaisal was actually more than the amount I was paying in PMI between 80% to 78%, so I just waited a few more months and asked them to remove it once they were required to.
You normally have a minimum waiting period plus being under 80 LTV to stop MI on a conventional loan and it never ends on FHA...
Getting a new appraisal won't help if not past the aging requirement.
Getting a new appraisal won't help if not past the aging requirement.
Gig Em!
Can't you take out another home equity loan so that the main loan won't be over 78%?
My servicing company has a step by step process doc on their site. I just looked into it the other day.
-2 years minimum unless you can establish that actual improvements have been made to the property to reduce the LTV.
-After 5 years it's 75% LTV requirement and a new appraisal will have to be completed to ensure the property value has not decreased.
-After 5 years it's 80% LTV and a new appraisal has to be completed up until you reach the scheduled payment based upon the original amortization schedule. You cannot accelerate the pay down to 80% and get it removed based upon the original appraised value, you will have to get a new appraisal for pay down situations.
-At the 78% LTV scheduled payment the MI is automatically removed assuming you have a good pay history.
The mortgage servicer does not have a vested interest in you having mortgage insurance. They don't own your loan. They are not the beneficiary of the policy, they just manage your loan on behalf of FNMA/FHLMC. They remove MI from loans every single day.
Any discussion between the servicer and appraiser about valuation expectations would be a violation by the servicer and they could face hefty fines and have major repercussions in servicing FNMA/FHLMC loans. The appraiser could also lose their license. You may not get the valuation you want or expect, but it's almost assuredly not due to collusion between the appraiser and the servicer.
-After 5 years it's 75% LTV requirement and a new appraisal will have to be completed to ensure the property value has not decreased.
-After 5 years it's 80% LTV and a new appraisal has to be completed up until you reach the scheduled payment based upon the original amortization schedule. You cannot accelerate the pay down to 80% and get it removed based upon the original appraised value, you will have to get a new appraisal for pay down situations.
-At the 78% LTV scheduled payment the MI is automatically removed assuming you have a good pay history.
The mortgage servicer does not have a vested interest in you having mortgage insurance. They don't own your loan. They are not the beneficiary of the policy, they just manage your loan on behalf of FNMA/FHLMC. They remove MI from loans every single day.
Any discussion between the servicer and appraiser about valuation expectations would be a violation by the servicer and they could face hefty fines and have major repercussions in servicing FNMA/FHLMC loans. The appraiser could also lose their license. You may not get the valuation you want or expect, but it's almost assuredly not due to collusion between the appraiser and the servicer.
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