Who Broke The Mortgage Loan To Value Calculator
by Pat from Millersville, Pennsylvania, USA
Ask Kate who broke the mortgage loan to value calculator: Kate, I have a PMI question. I purchased my home in 2004. I have not been delinquent on any monthly house payments. I read most PMI is terminated in 60-months yet I'm still getting the run around. Now I'm being told I need yet another appraisal (the first one was electronic) from the two companies of their choice at MY expense again.
Yet my loan is more then five years old now, seven actually in May of this year.
Help me please determine my LTV. I'm being told my balance must be 80 percent or less of the current appraised value. Please help me determine my LTV on my current loan balance of $73,795. I come up with approximately $59,036.
Gee if I am paying taxes on an assessed value of $90,400.00 haven't I met these guidelines? Thanks for your help.
Kate Answers: Who Broke The Mortgage Loan To Value Calculator
Dear Pat, When it comes to canceling mortgage insurance, it often seems the lender's calculator breaks or goes missing.
I also find when homeowners hear 80 percent loan to value being thrown around by lenders, it's intimidating. But if you understand the fundamentals, it's easier to stay in the driver's seat.
And that's where you belong because it's YOUR mortgage and YOUR home!
Calculating loan to value is actually quite simple! First of all, to calculate the LTV (shortened form of loan to value), you need three things. The current mortgage balance, the appraised value, and a simple calculator.
Let's Calculate Your Loan To Value
But before we go any further, the county assessment on which your property taxes are based is not the same as a market appraisal. You can read more about appraisals and how they work here
But for our example, let's say you've received a copy of your appraisal and know it is $92,500.
So grab your calculator (it does not have to be a financial one) and input your mortgage balance of $74,000. Then divide it by the appraised value of $92,500. See how 0.8 appears? That means your loan to value is 80 percent.
You Don't Need A Fancy PMI Calculator
But what if you want to know how much your home needs to appraise for, to reach the 80 percent loan to value? No worries, we can figure that out too. You don't need a fancy PMI calculator!
Input your principal balance of $74,000 and divide it by 0.8 to calculate the amount. Okay, does your calculator read 92,500? That's your answer!
If your house appraises for at least $92,500 and you owe $74,000, your LTV is 80 percent. That wasn't too hard, was it?
Getting Rid Of Private Mortgage Insurance
But what about private mortgage insurance (PMI) removal, your real concern!
A little history: Except for the isolated years when real estate values were escalating fast enough to make heads spin, PMI removal has been painfully confusing, costly, and frustrating to homeowners. Falling real estate values since 2007 have made it more difficult than ever.
Needless to say, I've received many letters asking how to remove private mortgage insurance, especially due to uncooperative lenders. So first I'd like you to read How Do I Cancel PMI (Part I)
where I'll walk you through the basics so you can learn your rights and responsibilities.
After writing that article, property values began to slide. So I wrote an important update for homeowners - How Can I Cancel PMI (Part II)
. Don't miss this important information for homeowners from the Federal Reserve Bank of San Francisco on PMI termination and cancellation.
I should also add Chris' letter, for the sake of anyone reading this who is considering to pay down their mortgage to expedite PMI removal. Chris wrote, 'I foolishly believed the bank would be happy to cancel PMI since I sent $40,000 to bring loan to 80 percent and never missed a payment.' Don't miss reading Chris' letter - Getting Rid Of PMI
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