the question I have is about PMI

ninazamora · Joined: 03 Oct 2008 Posts: 1 1.48 Dollars($)

I talk to the lander of my morgage about the pmi I have talk to friends and family and all responded to me that the pmi as long as I paid my morgage bill for 2 years without any delay I would qualify for the removal of the pmi but my lender said that I have to hire a property evaluator to be able to removed the pmi and that will cost mi an other 300 to 350 dollars for this paper work is this correct. to do because they send me a list of companies that work for them and the evaluation prosses of properties is this allow in the state of texas or in the usa for that matter or if not what can I do to be able to removed the pmi after 4 years of payment it cost me 150 dollars per month that it would amout to 1800 dollars per years that I could be saving need help please

elnoralittle · Posted: Fri Oct 03, 2008 9:08 am Post subject:

I think that the two year rule applies to how long you have to have the loan until they will consider it, but that is all according to the lender. PMI is generally removed by the lender once you have 78% loan to value. So say your property is worth $100,000, when you reach 78,000 the the PMI automatically drops. If you want it removed before then, lenders require you to have 80% loan to value and you need to furnish a new appraisal to provide proof to the lender. Generally the lender would require you to use their appraiser as well.

So your first step is to contact your lender or mortgage servicer (the number is on the payment stub). Inquire whether you are paying PMI and how much you are paying. Have them mail you information regarding their requirements and procedures for the removal of PMI. The documents you receive will usually give you step by step instructions. Ask your lender to provide, preferably in writing, the minimum amount the property will have to be valued at to qualify for PMI removal. An appraisal will be a most critical element in the PMI removal process. Inquire whether they have any requirements regarding the appraiser or appraisal that you should be aware of.
That is if you have a conventional loan.
If you have an FHA loan. If you paid an upfront mortgage insurance premium, you will also be charged a monthly mortgage insurance premium until the loan-to-value of your mortgage reaches 78 percent of the initial sales price or appraised value of your home, whichever was lower (provided that premiums are paid for at least five years). You will reach the 78 percent loan-to-value threshold in one of two ways: Through normal amortization as you make your monthly payments, or by paying additional principal on the mortgage. Your lender can advise you on when the mortgage will reach the 78 percent loan-to-value threshold. If you were not charged an upfront premium, you will pay the monthly premium for the life of the mortgage. And only hud can remove the mortgage insurance, not the lender.

So your first step is to contact your lender or mortgage servicer (the number is on the payment stub). inquire their rules for the removal of PMI, which it seems you have, but go ahead and have them mail you information regarding their requirements and procedures for the removal of PMI. The documents you receive will usually give you step by step instructions. Ask your lender to provide, preferably in writing, the minimum amount the property will have to be valued at to qualify for PMI removal. An appraisal will be a most critical element in the PMI removal process. Inquire whether they have any requirements regarding the appraiser or appraisal that you should be aware of, such as if they want you to use their appraisal or if it is okay to get your own.

chrisburns · Posted: Fri Oct 03, 2008 9:10 am Post subject:

PMI is required when the loan to value ratio of your home is above 80%.

The lender is asking for an appraisal to determine if your current loan amount is less than 80% of the current appraised value.

If you want to get rid of the PMI and you feel that your home will apprais high enough then I reccoment paying an appraiser to do it for you. You will save a lot of money in the long run if it works.

elnoralittle · Posted: Fri Oct 03, 2008 9:33 am Post subject:

Before they go and hire their own appraiser though, they should check with the lender to see if there are any appraiser requirements.

chrisburns · Posted: Fri Oct 03, 2008 9:41 am Post subject:

The original Posters comments were:
"my lender said that I have to hire a property evaluator to be able to removed the pmi and that will cost mi an other 300 to 350 dollars for this paper work is this correct. to do because they send me a list of companies that work for them and the evaluation prosses of properties is this allow in the state of texas"

So it sounds like he/she has already discussed this with the lender and they have given him/her the process by which to initiate the appraisal.

If I read it wrong then they should certainly check with the lender and make sure that it is done properly.

elnoralittle · Posted: Fri Oct 03, 2008 9:44 am Post subject:

I would get it all in writing. That way, you couldn't go wrong.

lisascherzer · Joined: 04 Jan 2008 Posts: 755 1.03 Dollars($)

The mortgage lender that told you that was lying. There is a requirement that you have it for at least 12 months. I think that person was estimating based on the assumption of home values rising at a certain pace.

If you feel that your home is worth more than 80% of what you owe then you will want to request the PMI taken off. You will need to follow the instructions the lender has given you to do this. As far as paying for an appraisal, it is really just a judgement call on what you feel your home will appraise at. You can do some research first through a real estate agent or there are even sources online that can give you some idea of what other comparable homes are selling for in your area. Then when you feel confident, go ahead with it.

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