Kansas City, MO · Member since 2017 · 29 posts · 3 votes
Hello, All- I purchased a condo in my city for 134k after my 5% downpayment. Because of that I have PMI. I have been in my unit four 16 months now. In the last 16 months there have been multiple units selling in my building for 175K +. Although I am on the first floor I have done some renovations to my unit. A friend of mine who’s a realtor is telling me I have major equity. Please see questions below.
1. How do I get rid of my PMI?
2. And I secure a HELOC from my equity?
Real Estate Professional · West Palm Beach, FL · Member since 2012 · 23k+ posts · 13k+ votes
8y
I assume you have a conventional loan (MIP on a fha will be for the life of the loan).,
You need to talk to your lender....PMI can be removed if your loan balance is 75% or less than the current appraisal, which you will have to get.
A heloc will be similar, you can borrow 80-90% of the value, less your first mtg amount.
Real Estate Professional · West Palm Beach, FL · Member since 2012 · 23k+ posts · 13k+ votes
8y
I assume you have a conventional loan (MIP on a fha will be for the life of the loan).,
You need to talk to your lender....PMI can be removed if your loan balance is 75% or less than the current appraisal, which you will have to get.
A heloc will be similar, you can borrow 80-90% of the value, less your first mtg amount.
Kansas City, MO · Member since 2017 · 29 posts · 3 votes
8y
Thank you all. I’m am indeed in a conventional loan. However I’ve reached out to my Previous lender and she stated the equity would be considered paper equity and I’d need to physically pay in 20% on my own before they’d remove PMI. I was also told I’d need to wait 2 years by Law???
Specialist · Riverside, CA · Member since 2015 · 6k+ posts · 3k+ votes
8y
It might be that you need an appraisal, you could ask around with other lenders and if you find someone willing to work with you ask your current lender to match their offer.
Rental Property Investor · Durham, NC · Member since 2016 · 7k+ posts · 7k+ votes
8y
Jordan Bradberry you may need to refinance. What your lender is probably referring to is you need to have 20 percent equity based on your purchase price.
So get around that you’d need a new appraisal like mentioned above but that may vary by lender
Investor · Dallas, TX · Member since 2015 · 446 posts · 197 votes
8y
You need to review the terms you agreed to in your lending paperwork. It’s all spelled out there, including how to remove it.
Refinancing is going to be your easiest and quickest option, assuming you can appraise at the right level to have 20% equity. Most
Conventional loans have a minimum 2yr PMI term, after which an appraisal and application and result in removal of PMI.
Kansas City, MO · Member since 2017 · 29 posts · 3 votes
8y
Thank you. My concern is losing my 3.5% interest rate, If I have to refi. I am likely to have a 4.85% rate on the refi just to drop a $130 PMI. Am I able to drop the PMI without re-fi?