I want my PMI to be lift. Bank considers only original price

1 Reply

On November 2017, at closing date, my loan was for $145,000 and the original appraisal was $158,600 then LTV was 91% and I had to pay about $70/ month of PMI. The Loan Consultant said: no problem at zip code 80123 the prices are going up therefore may be in about one year the price will be enough to remove PMI. December 2018, I went to the bank and the person in charge suggested me to wait until end of spring to request the new appraisal. On May 2019, I requested the new appraisal and it went to $180,000 while the loan was reduced to $142,000, therefore I thought that the new LTV was 78.8%. But the bank started this story: 1) the new price did not go down, but you have to put $14,936 in cash to reduce the principal or in home improvement. This will bring the LTV ratio to 80% using the original property value. For my surprise, even though the current price went up, they still use the original price. 2) The property is an apartment then I can't do sprinklers, fence, deck, basement or garage also paint, floor, kitchen furniture are considered cosmetic. Later they told me that bath renovation is acceptable, but I do not want to do any improvement since the price went to $180,000. Furthermore, recently another unit in the condominium with same distribution of mine went to $190,000. 3) After 2 years, the PMI may be removed once LTV reaches 75% or below, but a new appraisal will be necessary, because the last one expired on September 2019.

This regrettable experience made me review the Homeowners protection act of July 1998, but they talk about original price. As an Economist, I know that if you want to free part of a guaranty, you may refer to the current price or valuation, but they do not consider it for this case. How far I have to go to find a solution to remove my PMI? When I ask them what is their risk now, they tell me that we are walking in circles because they follow company's rules.

@Adolfo Valderrama Bielich the short answer here is that you find another lender who will refinance your current loan to remove the PMI. You'll need to analyze the total payment to see if there is benefit in doing this. You loan will be slightly higher (because of closing costs) and the rate MAY not be the same. Ensure that you know what your property taxes and insurance on your property is so they can calculate your payment accurately. Hope this helps.

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