re: Question About Home Purchase,PMI, and Appraisal Value

quote:

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The bank will consider the true value to be what you paid for it, not the appraisal, and that's what the PMI calculation will be based on.

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Can't you get an appraisal after purchasing the home and send it to the bank as a way to prove that the LTV is 80% or less?

I literally just got off the phone with the company doing our refi and I have a question sort of related to this thread.

Based on the appraisal, we are at 84% LTV. The options were:

1. second loan (which I don't want to do)
2. continue to pay PMI until LTV reaches 80%
3. Upfront PMI payment, where we pay ~$4500 either out of pocket or rolled into the loan (I would roll) and not have to worry about paying monthly PMI.

I am leaning towards 3. It would increase the monthly payment by ~$21, but would save us $150 on monthly PMI. Also, it protects against devaluation. It seems like the only downside is paying more than we would have to in the event the house appreciates to get us to 80% (although an obvious silver lining in that downside).

Am I on the right tracking in thinking rolling the cost of up front PMI into the loan is the way to go? Any downside I am missing?