Question about getting PMI knocked off of mortgage loan?
punkinbutt’smama asked:
I am aware that if our home appraises for more than 20% more than what we owe, that the PMI can be removed. But, my concern is that we also have a second mortgage. Do they figure the second mortgae into this also? I was hoping they’d only be looking at the first mortgage and that I could pay the money to have it appraised again and have the PMI taken off.
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I am aware that if our home appraises for more than 20% more than what we owe, that the PMI can be removed. But, my concern is that we also have a second mortgage. Do they figure the second mortgae into this also? I was hoping they’d only be looking at the first mortgage and that I could pay the money to have it appraised again and have the PMI taken off.
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Tags: First Mortgage, Mortgae, Second Mortgage
February 3rd, 2009 at 3:13 pm
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If it’s on the same house, then no — PMI protects the lender against your defaulting on the house; they want to see 20% equity in the house, as a form of security (if they have to foreclose, they’re more likely to get their money out of the sale; or, you’re more likely to be more attached to the house since you have a significant investment, and thus more likely to work with them to pay).
If you don’t have 20% equity, whether from a second mortgage or a drop in value of the house, then generally you cannot have PMI removed.
February 4th, 2009 at 11:50 am
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You were told wrong.
This is the BIGGEST misunderstanding of how PMI gets dropped.
The bank goes by the appraised value AT THE TIME OF THE PURCHASE….and NOT after your bought the house, in calculating when you have met that 20% to get your PMI dropped.
If you have been late in your payments, it states in your PMI agreement, that PMI does NOT have to be dropped even if you are 20% principle balance to appraised value.
Even if you are at 20% equity, some PMI agreements require that so many years of PMI payments have to be made before you can make the request to get it dropped.
Now you know why most people have to refinance to get rid of PMI….it is not as easy as calling up the local appraiser and then faxing over a copy and say, “I have 20% equity…and I’ve only been in the house 6 months…drop my PMI please.”
….oh, how I WISHED it were that easy.
Definition of equity: difference in the homes value vs what you OWE after ALL liens have been paid.
February 7th, 2009 at 3:23 pm
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Good thinking— to get an appraisal of your property the home must be for sale and the prospective buyer pays for the appraisal…
NO — appraisals are not done cause you want one. Sorry
February 9th, 2009 at 2:35 am
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I’m not sure but I though that PMI was to cover a portion of the loan because you didn’t have enough upfront money. My understanding was that that comes off when you have enough paid in. You sound as tho you have money problems and are upside down in your mortgages. You need a second job and pay it down. You, like many others, bought more than you could afford and there is no easy way out except to start living like what you can afford or go out and make more $.
February 11th, 2009 at 5:08 am
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PMI will take into consideration your first and second mortgage. One thing to check into is a local bank. Banks operate differently then mortgage companies when it comes to home loans. Most do not deal with PMI. I have worked for both, large mortgage companies, large chain banks and small local banks. I have actually found it more appealing to deal with a small bank. One bonus to the those small banks are that you typically will not find all those fees and yes they will use an older appraisal done for another mortgage company and often do not require surveys. This will save you some $. So check into that.