getting rid of PMI...re-appraising after 24 months

[Anonymous]

My lender permits me to get rid of PMI 24 months after closing if I want to get the house re-appraised to show I have more than 20% equity based on re-appraised value. My PMI isnt' horrible at $112.50 a month but it's money just going out the door. I bought the house very low based on the condition of the house and spent about $150k in renovations so even if I get it re-appraised now I am confident I have more than 20% equity, but stuck with the 24 month requirement.

Has anyone been able to remove PMI based on a new appraisal of the property?

[Anonymous]

Yes. And I had a soeadsheet of every single update I made, both inside and outside the house. I passed with flying colors.

[Anonymous]

Yes. It was easy.

[Anonymous]

Anonymous wrote:Yes. It was easy.

+1

[Anonymous]

Or if the PMI isnt' big, just pay off that loan entirely.

[Anonymous]

Anonymous wrote:Or if the PMI isnt' big, just pay off that loan entirely.

I don't think you understand what PMI is.

[Anonymous]

Anonymous wrote:Or if the PMI isnt' big, just pay off that loan entirely.

It's not a second mortgage like an 80-10-10. PMI is Private Mortgage Insurance which is insurance for mortgage holder in case you default on your payments. If you have less than 20% equity in the home, it protects the bank from too big a loss. If the owner refinances showing more than 20% equity, the refinance can go through without the buyer paying the PMI.

[Anonymous]

OP here, thanks. I don't know if the lender will bother asking me about my upgrades since it's based on a re-appraisal (and I assume the appraiser will take into the account the condition of the home, including upgrades/renovations). I have my calendar set to remind to request PMI removal exactly 24 months from loan closing.

[Anonymous]

Anonymous wrote:OP here, thanks. I don't know if the lender will bother asking me about my upgrades since it's based on a re-appraisal (and I assume the appraiser will take into the account the condition of the home, including upgrades/renovations). I have my calendar set to remind to request PMI removal exactly 24 months from loan closing.

Refi.

[Anonymous]

Anonymous wrote:My lender permits me to get rid of PMI 24 months after closing if I want to get the house re-appraised to show I have more than 20% equity based on re-appraised value. My PMI isnt' horrible at $112.50 a month but it's money just going out the door. I bought the house very low based on the condition of the house and spent about $150k in renovations so even if I get it re-appraised now I am confident I have more than 20% equity, but stuck with the 24 month requirement.

Has anyone been able to remove PMI based on a new appraisal of the property?

I'm a little confused by your post. If you had $150,000 for renovations, why do you have PMI at all?

But the way you do this before 24 months are up is to refinance.

[Anonymous]

Anonymous wrote:OP here, thanks. I don't know if the lender will bother asking me about my upgrades since it's based on a re-appraisal (and I assume the appraiser will take into the account the condition of the home, including upgrades/renovations). I have my calendar set to remind to request PMI removal exactly 24 months from loan closing.

Appraiser won't care about cosmetic upgrades. The only thing that will add value from an appraiser's standpoint is whether you added rooms or bathrooms above grade. So, for example, any basement renovations won't really matter.

[Anonymous]

Anonymous wrote:

Anonymous wrote:OP here, thanks. I don't know if the lender will bother asking me about my upgrades since it's based on a re-appraisal (and I assume the appraiser will take into the account the condition of the home, including upgrades/renovations). I have my calendar set to remind to request PMI removal exactly 24 months from loan closing.

Appraiser won't care about cosmetic upgrades. The only thing that will add value from an appraiser's standpoint is whether you added rooms or bathrooms above grade. So, for example, any basement renovations won't really matter.

Our appraiser cared. He noted that we had replaced carpeting and flooring, and replaced a sliding glass door and a window.

[Anonymous]

Anonymous wrote:

Anonymous wrote:OP here, thanks. I don't know if the lender will bother asking me about my upgrades since it's based on a re-appraisal (and I assume the appraiser will take into the account the condition of the home, including upgrades/renovations). I have my calendar set to remind to request PMI removal exactly 24 months from loan closing.

Appraiser won't care about cosmetic upgrades. The only thing that will add value from an appraiser's standpoint is whether you added rooms or bathrooms above grade. So, for example, any basement renovations won't really matter.

Not the OP, but while it is true that cosmetic upgrades (carpets, curtains, decorations, trim, etc) have no effect on the appraisal, structural ones will. Structural upgrades include not only adding rooms or bathrooms, but also include upgrades such as adding windows, doors, permanent handicap accessible features (ramps, internal elevators, weight bearing hand-rails, etc), upgrades to electrical, in-floor heating, solar panels, augmented geothermal heating. Also permanent upgrades like changing carpets to hardwood or tile, adding a kitchen island, adding built-in furniture all contribute.

There's a lot more than just bathrooms and bedrooms that can add to the value of a home. But essentially the differentiating factor is if it is permanent, e.g. something that cannot be easily removed by the owner when selling vs something that is easy to change or take out.

[Anonymous]

OP here, the house I bought was in really bad shape so we dumped nearly $150k into it, including replacing all 35 windows, upgrading the electrical panel from 60A fuses to newer 200A service, had to deal with plumbing problems because the waste lines were clogged with rust, redid the whole kitchen by knocking down load bearing wall, ripped out the subflooring to lay down new floors and install new water and electrical (washer dryer was in basement but now in kitchen), not to mention all new appliances.

Yes, I could refinance anytime but then I'd be hit with closing costs. Assuming mortgage rates remain relatively flat, it's cheaper for me to just have the bank remove PMI--my only out of pocket would be the appraisal.

[Anonymous]

Anonymous wrote:

Anonymous wrote:OP here, thanks. I don't know if the lender will bother asking me about my upgrades since it's based on a re-appraisal (and I assume the appraiser will take into the account the condition of the home, including upgrades/renovations). I have my calendar set to remind to request PMI removal exactly 24 months from loan closing.

Appraiser won't care about cosmetic upgrades. The only thing that will add value from an appraiser's standpoint is whether you added rooms or bathrooms above grade. So, for example, any basement renovations won't really matter.

That's not true. Our basement was unfinished. When we finished it and added another legal bedroom & bathroom down there, our appraiser accounted for that in a big way.