PMI And Home Appraisal Value
(New York, NY USA)
Ask Kate About PMI And Home Appraisal Value: Hello Kate, Do I still need to pay PMI? I'm buying a house for $270,000 with 5 percent down. But the house appraised for $325,000.
We had a lender required appraisal on this house. Our closing is scheduled for next week. Thanks, Kazim
Kate Answers: PMI And Home Appraisal Value
You are wise to ask about purchase price versus home appraisal value as it relates to private mortgage insurance.
For home purchases, the need for private mortgage insurance (PMI) is calculated on the loan to value ratio (LTV). The LTV is based on whichever is less, the sales price or appraised value of the house.
PMI And Home Appraisal Value - Down Payment
For example, since you are buying a house that costs $270,000, a 5 percent downpayment would be $13,500, a 95 percent LTV. Any less than a 20 percent downpayment, 80 percent LTV, and you will be required to purchase PMI.
Please note these calculations are based on the purchase price, not appraised value. The appraised value is not taken into consideration since the purchase price is lower.
What Is PMI? How To Cancel PMI?
Below, you'll find my guide to private mortgage insurance What Is PMI
addressing private mortgage insurance for both home buying and refinancing.
For example, one of the articles explains the three methods for getting rid of PMI - How Do I Cancel PMI
. You'll also like my more in-depth information found at How Lenders Calculate PMI
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Finally! PMI Answers You Need
What Is PMI - Could private mortgage insurance be your solution to equity and down payment problems? 2013 Update: Deductible mortgage insurance premiums.
Updates on HARP 2.0 Refinance with Borrower and Lender Paid Mortgage Insurance - PMI and LPMI.
Could you be entitled to a mortgage insurance refund from FHA?
How do lenders calculate PMI? Credit history, amount of down payment or equity, occupancy status, and loan type factors.
How Do I Cancel PMI Will refinancing or a new appraisal be required?
What to do if PMI Decision Making is getting in the way of refinancing or buying a house.
My name is Kate and I will be your guide - PMI Questions and Answers
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