Mortgage Insurance for STR

[Jonathan Stevens]

I recently purchased a cabin in the Smoky Mountains and have done some renovations to bring up the value of it. Purchased 10/5/21 and owe about $380k with a 10% down payment. My question, is there a way to get around the mortgage insurance on this property? I am seeing similar properties being sold for over $500k in my area which would put me at about 72% equity in the property and would save me over $100 a month. My current lender said I need to wait 2 years but I feel like of course they would say that to avoid me eliminating this payment. Please advise. 

[Andrew Postell]

@Jonathan Stevens on your PMI disclosure that is in your loan packet it will reference when your PMI will go away and a what LTV %. I am referencing this because some loan types and some property types might have DIFFERENT PMI than others. So it's important for us to reference our loan documents first to see what we have in writing.

Meaning, if my PMI dislosure reads that PMI will go away at 80%, then I can call my servicer to request the PMI to go away. They will immediately say "no"...because they are going off of your purchase price value. We don't want that so we will likely ask for a manager or someone higher. They will eventually state that if you pay for a new appraisal (ordered through them) that they would consider that new value. So you'll pay for an appraisal and request it.

However, if that PMI disclosure references that PMI will go away at 65%...then you'll need to wait a bit longer.

Please reference that disclosure to see what is allowed.  Hope all of that makes sense.