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I bought my house a little bit over a year ago. It was a fixer upper and I put 5% down. All renovation cost came out of my pocket. The house has appreciated in value since then and I believe I currently have between 30% - 35% in equity. My real estate agent also confirmed this value.
My mortgage is with Chase bank. I am currently looking into getting rid of the PMI and getting HELOC. I called chase about this but the problem I'm having is that they are tell me I have to pay for 2 different appraisals; one for PMI and other for HELOC. This doesn't make any sense to me since its the same company doing both transactions. The HELOC agent I spoke to said PMI is another department and they operate differently. I spoke to a mortgage specialist as well, she told me HELOC is a different department.
Basically, they are telling me PMI and HELOC are different department and they wont use same appraisal. Am I talking to the wrong people, paying ~$1000 in appraisal is not something I want to do. Does anyone have suggestion of what I should do?
There is no reason to stick with the existing originator of the loan. Given that you've had your mortgage for over a year, there are strong odds that Chase has sold the loan quite a while ago to Freddie Mac. If your estimate about now having more than 30% you very likely can find another lender that will gladly do a new loan that has no PMI and wrap any costs into the loan so you won't have any out of pocket costs. There are also almost certainly those that would be happy to open a HELOC with no costs to you, though you need to realize that you won't be allowed a HELOC that would give you access to more than about 70% of value.
Depending on what your goals include you may want to consider cash-out refi and/or a loan with different terms...
^ great info chet gave you. and spot on. personally, I have found credit unions offering the best rates but with attractive rates are waiting periods and you may not want to bank with them if that is a requirement to get the loan.
^ great info chet gave you. and spot on. personally, I have found credit unions offering the best rates but with attractive rates are waiting periods and you may not want to bank with them if that is a requirement to get the loan.
I fight this stereotype everyday. Not true! Credit unions are typically portfolio lenders, most process, underwrite and close our own loans. Yesterday, CDs were out for closings on the 15th. When the portfolio lenders started closing shop because the parent companies wanted nothing to do with the CFPB. Many mortgage bankers ran to credit unions. The result has been the best of both worlds, low rates and mortgage banking service. And, I know we are not the exception. Recruiters are constantly contacting us for competing CUs. And guess what, the names for those hiring are from the mortgage banking world. Your credit union may not be what it once was......we take calls 24/7.
I regularly structure combo loans to get rid of PMI, but that's not enough to justify a refi. Your first trust interest rate would have been higher if you had a combo loan (and no PMI) from the start. The fact that you are making the request before the first two years are up, makes me believe the PMI will not be removed - but I could be wrong. Be very cautious about adding a heloc before the PMI is removed. Altering your financial profile on that home is enough to deny the PMI removal prior to reaching 78% of the original value.
If you must pay two appraisal fees, then I would reconsider that lender. Agreed, you do not need to stick with your current lender. If you feel that you now have 30-35% equity in the home, refinance and remove the PMI. Most lenders will use the same appraisal to add on the HELOC. You can do a 70-75% LTV refinance and add on a HELOC up to a combined LTV of 90% after that closing, without any unnecessary fees.
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