Posted: 3/5/2007 7:19:00 AM EDT
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I called up my mortgage co. because I want the PIMI removed from my account. They want to require me to have an appraisal from one of their companies ($400.00) . Is there any way I can force them to just drop it , they know just how much I’m being assessed in property taxes & it’s well below the exposure limit ( .80 on the dollar) Any help appreciated. |
Unless you get to 15-20% equity, you won't be able to drop the PMI. You can do that by either paying off 20% of the loan or you have to have the appraisal done. I don't know of any other way. |
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The only way they can be "forced" to drop it,is for your principle to reach somewhere in the 22% paid range,leaving 78% unpaid. Most mortgage companies don't automatically reevaluate and drop it at 20%/80%. I just paid for the appraisal ($350-400) and won my case. Since my PMI was higher,I recouped my apraisal cost in something like 6 months. Not bad for a 3 year old house. |
| It's weird. My lender basically told me.... "nobody pays PMI anymore" and set me up with a ton of loan options... 80/20/0, 80/15/5, and a new kind of 95/5 loan where they cover the PMI. Mathematically speaking, the best deal was the 80/15/5 for my loan, so that is what I went with. |
True,no one has to pay PMI anymore, but they pay a higher interest rate for that 2nd loan that avoids the PMI. Over the length of the loan, I would have paid tens of thousands of dollars in extra interest from that higher rate,vs the single lower rate that I took,which came with PMI. I paid maybe $2400 in PMI before I got rid of it. Since rates aren't likely to drop below the very low 30yr rate I have now,I believe I made the right decision. |
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When you do an 80/20 the rate is higher on the 20 portion, but you still need to factor in the tax break. PMI is not deductable, second mortgage interest is. If you get a 10 year second the payments are often pretty close to the PMI and you at least get to deduct them. |