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Old 01-27-2012, 09:28 PM   #1
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Cancellation of PMI?

Hi!
I'm on the phone with the bank right now, but they're giving me a hard time.
Anyone ever cancel PMI without an appraisal before your original LTV date?

The guy I was talking to was also saying that I can't cancel EVER without an appraisal, which I knew was not true. He put me over to his supervisor who confirmed what I knew and said they would be "reviewing" PMI with this Customer Service Rep. I hope he doesn't get in too much trouble, but c'mon?! I know more about PMI than someone who works in the mortgage industry?

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Old 01-27-2012, 09:50 PM   #2
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Re: Cancellation of PMI?

I don't know how that would be possible

PMI is for those homeowners who don't have at least 20% equity in their home.... so in order to get rid of it i would understand the bank wanting written proof that your homes value was such that you had that 20% minimum equity.
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Old 01-27-2012, 10:02 PM   #3
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Re: Cancellation of PMI?

I don't know either, but maybe there are companies that don't require it? I dunno. If I were a bank, I'd require it. Still, it stinks. We've been paying extra and have it payed down and in the last two weeks the online estimates (which I think run high) have it valued lower than what we paid. GRRR. All but one home for sale or sold in our neighborhood has been a short sale or foreclosure! The one that is FSBO is listed 50k above what we paid.

I'm just glad that the super told me what our automatic PMI cancellation date is!
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Old 01-28-2012, 05:33 AM   #4
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It depends on the bank and probably could change from one mortgage to another. If I remember correctly with mine I will encur a few if I cancel before five years, but I know I won't be able to pay down that much in the time frame so I didn't pay it too much attention. I believe its written in my papers so you might want to check them.
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Old 01-28-2012, 05:37 AM   #5
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Re: Cancellation of PMI?

I just got a letter from my bank about this and it says if you want to cancel before the original date they "might" require an appraisal. So I guess they can basically do what they want!
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Old 01-28-2012, 06:22 AM   #6
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More banks are requiring appraisals to remove pmi because your house value probably has gone down in recent years. I have a friend who has paid for almost 40% of original mortgage and still has to pay pmi because her house dropped value by 50%. We live in mi though where houses have been hit hard. The house we live in had a 200,000 balance on their mortgage when it forclosed. It only appraised at $100,000 and we only paid $62,000
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Old 01-28-2012, 08:42 AM   #7
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Re: Cancellation of PMI?

If you have 20% value (80% left), it can be dropped, but most lenders require an appraisal. This in the current market can bite you. If the appraisal comes back lower than the original appraisal, that becomes your new value that needs 20%...so if you bought at 200K, 20% paid = 160K. If your appraisal comes back at only 175K, then now you need to have hit 140K...

Once you have 22% value (78% left) of whatever the original value of the house was determined to be as of the time of the loan, the lender must automatically drop the pmi--no appraisal & no petition required. So in the above example, if you bought at 200K, 22% paid = 156K & they have to let you drop pmi.

HTH & GL!!
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Old 01-28-2012, 09:04 AM   #8
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Re: Cancellation of PMI?

We cancelled ours last summer. However, we had an BPO (Buyer's Price Opinion). Our bank required at least that and we paid $100 for one.

We were told the only way we could get out of the PMI early without an current appraisal or BPO was to have it over 40% paid down on the original appraisal value. I was told the % varies dependent on the area you are located in.
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Old 01-28-2012, 11:50 AM   #9
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Re: Cancellation of PMI?

Quote:
Originally Posted by TheFlare15 View Post
If you have 20% value (80% left), it can be dropped, but most lenders require an appraisal. This in the current market can bite you. If the appraisal comes back lower than the original appraisal, that becomes your new value that needs 20%...so if you bought at 200K, 20% paid = 160K. If your appraisal comes back at only 175K, then now you need to have hit 140K...

Once you have 22% value (78% left) of whatever the original value of the house was determined to be as of the time of the loan, the lender must automatically drop the pmi--no appraisal & no petition required. So in the above example, if you bought at 200K, 22% paid = 156K & they have to let you drop pmi.

HTH & GL!!
Where are you getting the bolded? Is it a local/national law? I haven't heard that before.
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Old 01-28-2012, 01:10 PM   #10
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Re: Cancellation of PMI?

We have an FHA loan and when we hit either 20 or 22%, our PMI is automatically dropped, regardless of time frame. As soon as our SLs are paid off, we're hitting the mortgage hard to get to that level. Once we drop PMI, then we'll reevaluate to see if we want to continue with the mortgage or start on retirement savings.

We could petition sooner and see what our appraisal is and go from there, but the cost of the appraisal with the unknown of what the result would be, it isn't worth cost to us. I don't know if it matters or not, but home prices in our area have remained stable. Our house is probably worth $10-15K more than what it was when we bought it 9 years ago.
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