Do I need an Appraisal to remove PMI

Guest 0.10 Dollars($)

i had taken a fannie mae loan and paid off more than 20% of the original home value. I called up the mortgage company and it said that I need to pay $400 to get an appraisal done before they would remove the pmi. But isn't this done automatically when I pay off 20% of the original home value. Is it correct?

Guest 0.10 Dollars($)

Your mortgage company is right in asking for an appraisal to be done. The company wants to make sure that your home value has not changed. For instance, if you have made any repair work on your home or any improvement, then you may have to pay more so that your debt payments till now add up to 20% of the home value.

colin · Posted: Fri Jun 15, 2007 6:37 pm Post subject:

Hi Shane,

Welcome to Mortgagefit forum.

If you have on time payment record for the last 1 yr. & your home is at least 2 yrs. old then pmi on the loan can be dropped after ltv goes below 80%.

Mortgage company must have given you name & address of local appraisers who are on their approved list. You will need to contact any of those appraisers to get your house appraised. Appraisal is required to confirm that you do have 20% equity in the house. The cost they have stated is quite reasonable at $400.

Colin

Guest 0.10 Dollars($)

If your mortgage was closed on or after July 29, 1999 then your PMI will automatically get terminated when equity in your home reaches 22% of the original home's value & your payments are current. (hud.gov/offices/hsg/sfh/res/respapmi.cfm)

Guest 0.10 Dollars($)

My lender is insisting to do my home appraisal by using his appraiser. But can he force me to do so when I am removing my PMI?

larry · Joined: 27 Jun 2007 Posts: 3051 428.03 Dollars($)

Hi Augustus,

The lender requires the appraiser to give his best quality of work and to determine the appropriate value of the property. So it is quite likely if he wants the borrower to use his appraiser as he will be sure of his appraiser's quality of work.

0.10 Dollars($)

Hi Agustus,

When you want to remove your PMI, the lender may require you to do an appraisal and that is not done automatically. You have to pay a fee for that. Nowadays, many lenders appoint appraisers through nationwide appraisal management at pretty negotiated fees. And 400$ is quite an affordable amount. So you must not face any problem to pay the required fee. But if you are not satisfied with his appraisal of your property, you can use an appraiser of your choice and get another appraisal done

lisascherzer · Joined: 04 Jan 2008 Posts: 599 69.56 Dollars($)

It might be easier just to refinance since the 30 year fixed rate is around 5.5% with no points. You could look at a no cost loan also that would be below your current rate and save both on the pmi insurance and your interest rate.

bthahir · Joined: 05 Sep 2007 Posts: 36 13.18 Dollars($)

Yes they can do it, its done to ensure that your house value is same or higher than before. For eg if your house value has decreased by 10% obviously the lender is on risk. So the lenders do it to be on safer side

enriko · Joined: 05 Mar 2008 Posts: 61 16.64 Dollars($)

Hi

They do have a right to ask that.
Because over the years the value of property might have changed. Maybe you have fixed something or reconditioned it.

take care

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