My wife and I have a mortgage through BB&T that we’ve had for about 8 years now. We’ve always paid on time and even have made extra payments. We were fortunate as we were able to purchase our home at just about the very bottom of the market. The home was built in 2000 and is on 5 acres. We paid $141,000. We recently had an appraisal and the property appraised at $365,000. The market here in Central Florida has made a great recovery and is nearing pre- housing crisis prices.
We inquired at BB&T about having the PMI dropped from our mortgage payment and we were told that is no longer an option on mortgages since the housing crisis.
I’m not quite convinced that’s accurate, although I guess it could be. So, is it possible to have PMI removed?
It doesn’t say anything about not being done since the crisis. Among other methods, they do mention the obvious way to get rid of it, though – refinance the house. I assume that’s not an option? Rates are pretty low again, but there are some closing costs.
Refinancing could be an option, but we’ve got a super low interest rate, don’t know if we can get the same. No harm investigating that option though. But then of course we’d have tho do the math to see if the closing costs would outweigh the PMI savings.
I have requested the correction for you. Moderators don’t systematically read every post and they probably didn’t see this one. In the future click the Report icon in your own post to get Moderators’ attention.
I would suggest reading your mortgage agreement. It should be stipulated there what the requirement is for this loan. However, the Homeowner’s Protection Actof 1999 gives you the right to cancel PMI, and lenders are required to cancel PMI coverage automatically once the loan is scheduled to reach 78 percent of the original LTV.
Based on your purchase price and current value, you have 60% equity just from appreciation, plus 141,000 minus your current loan balance. There is no way they should still be charging you PMI unless you have liens, or other extraordinary circumstances.
TL;DR BB&T is bullshitting you and may even be violating the law.
Yeah, my mortgage company just recently dropped PMI from my mortgage since I met the 80% LTV ratio through normal monthly payments on my zero down loan. I probably could have done it earlier but I’d have had to pay for an appraisal and redo the loan but my interest rate is really good for an FHA mortgage so I just let it ride.
Ask your mortgage company if an appraisal that comes in with the right LTV will remove the necessity for PMI–if they say no then they’re probably not being straight with you.
Early 2018 I knew we were close so I wrote the mortgage servicer and requested the PMI be removed. They wrote back, “Um… We did that last year.” I checked, and they were right. So it was automatic for us.
The bank refused to remove my PMI even after I paid back 80% of the loan–that’s 80% of the mortgage; the LTV would have been even more favorable. They said that the loan has to be at least 5 years old before PMI can be removed.
The law refers to the original valuation. If you pay for a new valuation, they may remove the PMI to encourage you not to switch banks. But it’s not the law.
Did you pay to have an independent appraisal, or was this a Realtor giving you an appraisal based on comps?
Based on Melbourne’s comment, I would consider a refi with another bank. Not sure how the interest rates today compare to what you got in 2000, so run the numbers to see if it’s worth it.
We purchased our current home via a mortgage 5 years ago and it included PMI. We bought below market value but did also borrow extra to finance some renovations so at the time of our loan we were still under the appraisal but not enough to avoid PMI even with our downpayment. Housing values have skyrocketed since then and I inquired about removing PMI because the current value of our home would mean we no longer need the PMI. In order to have the PMI removed the lender told us we would have to have a new appraisal done and based upon the new value we could possibly have the PMI removed. Now assuming the new appraisal comes in where it should be then this should not be a problem. But I’m lazy and just haven’t done it yet. I need to get on the phone and schedule the appraisal and pay the $$. I don’t know though if the new appraisal will impact our property tax… I think that only happens if the county does their reappraisal which is every 4 years I think.
The only excuse BBT could have is that you have LPMI , or they thought that.
BBT has two types of PMI they talk of…
Lender payed PMI, LPMI can’t be removed, its just part of the interest rate anyway. I guess one can mention LPMI as a reason for a higher or lower interest rate, but the change being made, or that you want, is the interest rate you pay.
BPMI is borrower paid PMI , and that is certainly to end when you have sufficient equity - based on the initial value (not todays market value, which means that they dont have to stop B PMI when there is a boom in prices, because in a crash there may be insufficient equity)