PMI on less than 20% down, but LTCV >20% with appraisal
Why does the consumer (loan holder) still have to pay PMI when the property's LTCV is 20% or greater after the appraisal needed for the loan.
I bought a property for $210,000 and only put 10% down. It appraised for $250,000. I had to wait to remove PMI after a refinance a year down the road?
This happened in 2008 during the brink of collapse.
Most Popular Reply
Because the purchase price was used, not the appraised value, when you are purchasing a home. The valuation is based on the lower of the purchase price OR the appraised value. The thinking is; if you can buy the home for $210,000, anyone could buy the home at $210,000, so that is the actual worth of the home at that time. I'm glad you found a way out of PMI a year later!