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Message
Getting rid of mortgage insurance- Updated with answer
Posted on 3/20/18 at 10:57 am
Posted on 3/20/18 at 10:57 am
I bought my house in February of 2015. Since then I have been paying roughly $140 a month to PMI which is like flushing it down the toilet. The only way to get rid of it is owning 20% of the home. Here are the numbers:
In 2015 it appraised for $214,000
I currently owe $185,000
With area and home improvements, I feel an updated appraisal would be close to $225,000. Meaning $180,000 would be my 20% mark to get rid of it.
With that being said, Is it worth getting an updated appraisal?
In 2015 it appraised for $214,000
I currently owe $185,000
With area and home improvements, I feel an updated appraisal would be close to $225,000. Meaning $180,000 would be my 20% mark to get rid of it.
With that being said, Is it worth getting an updated appraisal?
This post was edited on 3/21/18 at 6:56 am
7
Posted on 3/20/18 at 11:07 am to tiger10lsu
quote:
With that being said, Is it worth getting an updated appraisal?
Only if you feel it appreciated by that much. If not it'll just be pissing in the wind like PMI. Call the appraiser and just shoot the shite with him before you commit to it. You'll get at least an idea on it before you cut the check. Ask him if he's appraised any other prop in the area simlar bed/bath/sq ft cause that's all they use is comps no matter how much nicer on the interior your house may or may not be.
Posted on 3/20/18 at 11:08 am to tiger10lsu
I was in a similar position as you a few years ago and decided against the new appraisal. I didn’t want to risk spending $500-$600 and it not appraise.
Instead, what I did was spend down all the cash I had on extra principal payments to void the PMI, and took on interest free credit card debt to pay bills. I figured I could save up enough money to pay off the balance by the end of the interest free period. It was risky and I would have been in a bind if I had an unexpected expense during that time, but it worked out for me. I wouldn’t necessarily recommend this strategy, but I hated PMI so much that it was worth the risk.
Instead, what I did was spend down all the cash I had on extra principal payments to void the PMI, and took on interest free credit card debt to pay bills. I figured I could save up enough money to pay off the balance by the end of the interest free period. It was risky and I would have been in a bind if I had an unexpected expense during that time, but it worked out for me. I wouldn’t necessarily recommend this strategy, but I hated PMI so much that it was worth the risk.
Posted on 3/20/18 at 11:12 am to PhiTiger1764
I have had my house for 4 years and will almost be done with PMI once I get my house appraised.
Posted on 3/20/18 at 11:29 am to tiger10lsu
My PMI is only $44 a month. $140 would drive me insane.
Posted on 3/20/18 at 12:26 pm to HollierThanThou
quote:
My PMI is only $44 a month. $140 would drive me insane.
I hate it.
Thanks everyone for your input. I'm going to call and talk with an appraiser.
Posted on 3/20/18 at 12:30 pm to tiger10lsu
22% is your mark most likely, not 20%. they are different numbers for when you first get a mortgage vs dropping it later.
Posted on 3/20/18 at 12:38 pm to tiger10lsu
When did you buy the home? Did you use an FHA loan?
Posted on 3/20/18 at 12:42 pm to PhiTiger1764
quote:
I didn’t want to risk spending $500-$600 and it not appraise.
quote:
Instead, what I did was spend down all the cash I had on extra principal payments to void the PMI, and took on interest free credit card debt to pay bills.
Your take on risk is very interesting.
Posted on 3/20/18 at 12:43 pm to tiger10lsu
quote:
With that being said, Is it worth getting an updated appraisal?
Probably. But is it worth it to do home improvements? Perhaps not. I wouldn't go sinking a bunch of money into the house unless they will really help the value. If these are improvements you want done regardless, then by all means go forward with them
Posted on 3/20/18 at 12:55 pm to ATLdawg25
quote:
Your take on risk is very interesting.
I mean... I leveraged free money. It was a calculated risk. Saved me $500.
Posted on 3/20/18 at 12:58 pm to PhiTiger1764
Seems like a lot of gymnastics to save $500...
Posted on 3/20/18 at 1:02 pm to Broken Ear Glen
quote:
Only if you feel it appreciated by that much. If not it'll just be pissing in the wind like PMI. Call the appraiser and just shoot the shite with him before you commit to it. You'll get at least an idea on it before you cut the check. Ask him if he's appraised any other prop in the area simlar bed/bath/sq ft cause that's all they use is comps no matter how much nicer on the interior your house may or may not be.
This may be a dumb question, but would you need to refi in order for the lender to accept a new appraised value? Even if you didn't, wouldn't the lender want to have an appraiser they contracted with go out and perform the due diligence? If so, there's no guarantee that appraiser comes back with the same valuation.
Posted on 3/20/18 at 1:05 pm to birdieman
I opened a credit card with 15 months interest free on purchases. That’s literally all I did. No gymnastics.
An appraisal was not guaranteed either. I could have blown $500 for nothing.
An appraisal was not guaranteed either. I could have blown $500 for nothing.
Posted on 3/20/18 at 1:19 pm to GeauxColonels
quote:
This may be a dumb question, but would you need to refi in order for the lender to accept a new appraised value? Even if you didn't, wouldn't the lender want to have an appraiser they contracted with go out and perform the due diligence? If so, there's no guarantee that appraiser comes back with the same valuation.
Valid points. Can't say yes or no. Can say though when I tried to refinance my lender just sent me contact info's on a couple they were familiar with - nothing mandatory. I remember her telling me that if I wanted to use someone I knew that I could certainly do so. Sucked for me cause I was out of pocket $500 after my appraisal came back lower than my purchase price. I never had PMI, I was jut trying to lower my note since the interest rates at the time were a point lower than what my fixed rate was.
Posted on 3/20/18 at 1:47 pm to tiger10lsu
quote:
. I'm going to call and talk with an appraiser.
You can talk to an appraiser, but you have to go through your mortgage company to get the appraisal done to remove the PMI.
Posted on 3/20/18 at 3:55 pm to tiger10lsu
Shouldn't require a full appraisal. Likely a drive-by or BPO. Shouldn't cost 500
This post was edited on 3/20/18 at 3:56 pm
Posted on 3/20/18 at 4:47 pm to tiger10lsu
don't call an appraiser. The PMI company will have you pay for an appraisal from an appraiser on their list. You getting an appraisal before talking to them is a waste. bite the bullet pay their appraiser and see how it turns out.
Posted on 3/21/18 at 6:59 am to hawkeye007
So I called and talked with my mortgage company yesterday. My loan is an FHA loan. Any loan after June of 2013 says you can not get rid of PMI with an FHA loan. The only way is to refinance. My current interest rate is 3.375%. If I were to refinance and get a new rate of 4.5-5%. I would actually pay more. They said wait for the interest rates to go back down. Then refinance. 6 months-a year
Posted on 3/21/18 at 7:24 am to tiger10lsu
quote:
So I called and talked with my mortgage company yesterday. My loan is an FHA loan. Any loan after June of 2013 says you can not get rid of PMI with an FHA loan. The only way is to refinance. My current interest rate is 3.375%. If I were to refinance and get a new rate of 4.5-5%. I would actually pay more. They said wait for the interest rates to go back down. Then refinance. 6 months-a year
Yeah and this is why I asked my questions earlier (which were subsequently downvoted for whatever reason). I was worried that with the little amount you've paid off that it was a post-2013 FHA loan. Sucks but those rules changed.
Something else that sucks is that there's indication that rates will not be going down any time soon. Some fears that they'll go up.
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