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Old 04-17-2016, 10:07 PM
 
924 posts, read 1,021,424 times
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Hey guys, sadly I am paying 150 for PMI a month. my lender said I can reduce it if I come up with 20% and/or something with equity.

So if I were to save 20% of the original mortgage loan, or what its currently at?
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Old 04-18-2016, 06:21 AM
 
Location: MID ATLANTIC
8,674 posts, read 22,919,247 times
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Quote:
Originally Posted by willc86 View Post
Hey guys, sadly I am paying 150 for PMI a month. my lender said I can reduce it if I come up with 20% and/or something with equity.

So if I were to save 20% of the original mortgage loan, or what its currently at?
What state is property located in?
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Old 04-18-2016, 01:11 PM
 
2,170 posts, read 1,955,021 times
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Either pay extra each month till you hit that 20% or do somethings to the house to raise the value and have it reappraised. Keep in mind though if you raise the value of your home with projects, that is not all equity in the eyes of your lender. They're going to calculate your Loan To Value to come up with the new percentage.

So for example, if you bought your home for $300k and put down 10% you'd need to put down another $30,000 to lift PMI. If you added $30k of value to your home through updates and projects your LTV is gonna be 81.8%, still not quite low enough to have that PMI removed so you'd have to pay down a little extra. However, if your home appraised for $340k you'd be below 80% and could have it lifted.

We also pay PMI, we've done a number of updates which should have raised our value about 5% that coupled by a few extra payments should be enough to have the home reappraised and PMI dropped by year 2 instead of year 7 as scheduled. Best of luck!
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