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re: Question about PMI

Posted on 1/21/20 at 12:55 pm to
Posted by tigeraddict
Baton Rouge
Member since Mar 2007
11827 posts
Posted on 1/21/20 at 12:55 pm to
quote:

When everything is finished. Assessed value of total property is $350,000.



quote:

Bank is only loaning $300,000.


Assuming the whole property (house and land) is appraised to be $350,000, then you need to have 20% of the appraised amount in equity in order to avoid PMI.

The "theory" behind the requirement of PMI is the lender will not get full value of a repossessed house in auction. likely they will get 80% of the value. and in your case the value of the property is $350,000

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