I bought my first home last year and only put 3% down. My loan is an FHA loan. Can the home improvements I've made (new floors, renovated kitchen and bathroom) be used to build up my equity in my home to where a new appraisal may help me achieve the 20% mark?

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Posted by UpToPar

Baton Rouge

Member since Sep 2008

22213 posts

Posted on 2/21/18 at 10:49 am to Olric

Sure, if the new appraisal is higher than the original. I don't know how much weight an appraiser would give to new floors and a renovated kitchen and bathroom though.

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Posted by RedBeardBaw

Member since Feb 2017

371 posts

Posted on 2/21/18 at 10:51 am to Olric

If you put less than 10% down on an FHA loan, you have to pay PMI for the life of the loan. Only way to get rid of it is to refinance through a conventional loan.

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Posted by hawkeye007

Member since Feb 2010

5907 posts

Posted on 2/21/18 at 10:55 am to Olric

FHA is a high cost loan. So you put 3% down and then FHA charged you an upfront PMI fee of 1.75% so you really only put down 1.25%. Your stated renovations might add a little value to the house but not a a lot. I would advise you to pay extra on your house payments and when you get closer to 90% loan to value ratio to refinance your house to a conventional loan and reduce your monthly PMI. In the mean time enjoy your home ownership

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Posted by mtcheral

Member since Oct 2008

1949 posts

Posted on 2/21/18 at 7:50 pm to Olric

I’m just finishing a major Reno plus addition that should add about 40% to my value so I’m hoping a new appraisal will wipe out pmi. I don’t want to refi because I got such a low rate last year when I purchased.

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