Ok that is very good to know. The previous comments have said my home improvements would not have significant impact on my appraisal but the home was built in 94 and left untouched since. Comps in the area at our time of purchase were 130 while we were able to buy at 102. At 2100 sq ft I feel as though that could be a significant impact. Is my logic sound that the more money I put into my home now the less I will have to throw away in PMI or should I use my excess funds to pay down the principal?

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Posted by barry

Location, Location, Location

Member since Aug 2006

50379 posts

Posted on 2/21/18 at 11:28 am to Olric

quote:
Is my logic sound that the more money I put into my home now the less I will have to throw away in PMI or should I use my excess funds to pay down the principal?

Upgrade the house as it will likely "pay for itself"(based on the areas you are upgrading) and you get to enjoy it and get rid of flushing money down the drain with PMI payments.

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Posted by LSUJuice

Back in Houston

Member since Apr 2004

17687 posts

Posted on 2/21/18 at 1:34 pm to Olric

I think most would tell you if you're at 20% and no longer have PMI don't pay extra principal. Assuming you don't have a terrible rate, over time that money will perform better in the market.

From a monthly payment standpoint make sure to factor in your property tax increase due to the presumed increase in value.

This post was edited on 2/21/18 at 1:37 pm

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Posted by hawkeye007

Member since Feb 2010

5907 posts

Posted on 2/21/18 at 2:08 pm to Olric

your idea is making more since now since i know the numbers . Your max LTV ratio is 95% for a refinance conventionally. I would look at refinancing the house. You bank will order an appraisal and you might see enough increase in value to get rid of PMI or greatly reduce the PMI payment. The rate will be higher but the PMI will be lower.

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