Do I need an Appraisal to remove PMI?

Your mortgage company is right in asking for an appraisal to be done. The company wants to make sure that your home value has not changed. For instance, if you have made any repair work on your home or any improvement, then you may have to pay more so that your debt payments till now add up to 20% of the home value.

Hi Shane,

Welcome to Mortgagefit forum.

If you have on time payment record for the last 1 yr. & your home is at least 2 yrs. old then pmi on the loan can be dropped after ltv goes below 80%.

Mortgage company must have given you name & address of local appraisers who are on their approved list. You will need to contact any of those appraisers to get your house appraised. Appraisal is required to confirm that you do have 20% equity in the house. The cost they have stated is quite reasonable at $400.

Colin

If your mortgage was closed on or after July 29, 1999 then your PMI will automatically get terminated when equity in your home reaches 22% of the original home's value & your payments are current. (hud.gov/offices/hsg/sfh/res/respapmi.cfm)

My lender is insisting to do my home appraisal by using his appraiser. But can he force me to do so when I am removing my PMI?

Hi Augustus,

The lender requires the appraiser to give his best quality of work and to determine the appropriate value of the property. So it is quite likely if he wants the borrower to use his appraiser as he will be sure of his appraiser's quality of work.

Hi Agustus,

When you want to remove your PMI, the lender may require you to do an appraisal and that is not done automatically. You have to pay a fee for that. Nowadays, many lenders appoint appraisers through nationwide appraisal management at pretty negotiated fees. And 400$ is quite an affordable amount. So you must not face any problem to pay the required fee. But if you are not satisfied with his appraisal of your property, you can use an appraiser of your choice and get another appraisal done

it might be easier just to refinance since the 30 year fixed rate is around 5.5% with no points. you could look at a no cost loan also that would be below your current rate and save both on the pmi insurance and your interest rate.

Yes they can do it, its done to ensure that your house value is same or higher than before. For eg if your house value has decreased by 10% obviously the lender is on risk. So the lenders do it to be on safer side

Hi

They do have a right to ask that.
Because over the years the value of property might have changed. Maybe you have fixed something or reconditioned it.

take care

I like putting the pressure on them to get the PMI off or you might refinance with someone else.... They are responsible for the appraisal so they get to pick the appraiser but if you let them know you may change lenders they may very well do a 'comp search' to see if that is really feasible and then you can decide to move forward or not in either direction.

boy it must be nice to work in an environment that provides a beautiful potted plant right behind your desk! you go, mike!

Poor George, I'm getting a "caged animal" vibe off you at the moment....dreaming of a tropical holiday somewhere....palm trees, hammocks, white sand beaches and cocktails that come in a coconut shell....Give yourself a hioliday George, you deserve it!

you can always get one of those tropical island calendars in the mean time!

on topic:

PMI can be a leech on you income, effectively taking money that could be servicing the loan and draining it away for minimal gain. this is not to say that good mortgage protection insurance products aren't out there - they are - they're just not the ones touted to you by lenders with a vested interest in funneling business to a specific insurer.

indeed, i do need a vacation, and though i don't necessarily need it to be tropical, i would be best served by going overseas somewhere. not worried about the cocktail, either; a nice glass of wine with a sumptuous dinner will suffice.

back to the topic again, wretched: are you confusing private mortgage insurance with mortgage life and/or disability insurance? either that, or you're mixing the two together. the original question was concerning mortgage insurance that allows a borrower to have a smaller down payment and still obtain a loan (not in october of 2009, unfortunately, but that's another issue). "the ones touted by lenders" are indeed not worth the trouble. if someone wants to have a life policy for any reason, mortgage life insurance is absolutely not the product to get (ditto for disability).

Almost all insurances provided by banks in relation to their products are overpriced compared to their values. you're alomst always better served by a similar product provided by another independent insurer.

Appraisers cannot do just a comp search. Criminal loan officers tried and often succeeded in coercing appraisers to do them. A ball park figure is an Appraisal. Parties other than the Appraiser can do that, but not the Appraiser. SEE ADVISORY Opinion 19 in USPAP, this addition or most of the prior ones for some years. The Appraiser has to comply with FIRREA that requires USPAP be followed, been that way for twenty years and really before that to those that had remotely any ethics at all. HVCC reiterates that, but it is nothing new. But many crooked loan officers and some crooked appraisers were in kahoots and just did what ever they wanted till they got caught for committing a crime. If you want to know a ball park call a realtor, if you want the market value call an Appraiser and expect to pay a reasonable price for the Appraisal. The lenders to remove PMI have every right to require they chose. If your rate is equal, close or lower it may not be intelligible to refi, removing pmi is often a better option. Consider all the variables, make an informed decision. When you get a loan, if you are required to have PMI, make sure you understand what you need to do to get rid of it some day, understand what you sign - have an attorney help you if you do not understand. In some states like CA, use of attorney's at closings are uncommon as i understand it, but in others like IL, they are common place. If the lender represents their own interests and the title company represents their own and perhaps the lenders, who represents yours, you and you only. Always good to have an attorney that is experienced in real estate closings, even if only a refi. Many loan officers are your buddy until you sign the papers at the closing and then become unresponsive, not a surprise is it...