PMI And Home Appraisal Value

by Kazim
(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.

Kazim continues... 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

Dear Kazim,

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.

Best Wishes,

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FINALLY! The PMI Answers You Need

What Is PMI - Could private mortgage insurance be your solution to equity and down payment problems?

You might not know this but you could 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 contribute to calculations.

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.

Ask Kate About PMI - Ask a question about PMI and get an answer from Kate.

My name is Kate and I will be your guide - PMI Questions and Answers

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