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2-3 years a new appraisal and possibly get rid of pmi
Nope. They are required to remove PMI upon homeowner's request once 20% has been paid off. If the homeowner does not request to have PMI removed, it goes away automatically at 22%.
An appraisal is only necessary if less than 20% of the home is paid off in cash and the homeowner requests to use their home's equity appreciation to reach an 80/20 LTV ratio. The lender will require an appraisal and may require a higher 75/25 % LTV ratio in order to remove PMI.
Last edited by Nolefan34; 10-30-2016 at 10:10 AM..
Nope. They are required to remove PMI upon homeowner's request once 20% has been paid off. If the homeowner does not request to have PMI removed, it goes away automatically at 22%.
This simply is not true certainly not the absolute you make it. In my experience lenders frequently require an appraisal otherwise how would you figure an accurate ltv?
Quote:
An appraisal is only necessary if less than 20% of the home is paid off in cash and the homeowner wishes to use equity appreciation to reach an 80/20 LTV ratio. In which case the lender will require proof, in the form of an appraisal, that the home has appreciated a certain amount in value.
Again this is simply not true
This is from Wells Fargo
Quote:
Canceling PMI
For loans covered by the Homeowners Protection Act of 1998 (HPA), you can request to have PMI removed when your balance reaches 80% loan-to-value (LTV) based on the original value of your home. If you're requesting to have PMI removed, you:
Have to get an appraisal through Wells Fargo (at your own expense) to confirm your home's value hasn't declined since closing
Must not have had any 30-day late payments within the past 12 months
Must not have had any 60-day late payments within the last 24 months
Otherwise, we'll automatically cancel it when your balance reaches 78% LTV if you're up to date on your payments.
If your home's value went up since closing, you may be able to cancel your PMI earlier, based on its current value. In some cases this can happen if you've made substantial improvements to your home. You'll need to get an appraisal to confirm its value. See our FAQs to learn more.
This simply is not true certainly not the absolute you make it. In my experience lenders frequently require an appraisal otherwise how would you figure an accurate ltv?
Again this is simply not true
This is from Wells Fargo
You are confused. The link you posted refers to situations where the homeowner tries to get PMI removed prematurely without paying 20% cash. Read the link below I copied/pasted.
If you simply pay off 20% of the home in cash, thus reaching an 80/20 LTV ratio, the lender is required to remove PMI upon homeowner request. This is Federal Law. There are no strings attached. No appraisals needed.
LTV ratio would be based on the original purchase price of the home, or the original appraised value, whichever is less. So if the original price was $100,000, and the buyer puts 15% down ($15,000), once they pay the next 5% ($5000), PMI goes away.
You are confused. The link you posted refers to situations where the homeowner tries to get PMI removed prematurely without paying 20% cash. Read the link below I copied/pasted.
If you simply pay off 20% of the home in cash, thus reaching an 80/20 LTV ratio, the lender is required to remove PMI upon homeowner request. This is Federal Law. There are no strings attached. No appraisals needed.
LTV ratio would be based on the original purchase price of the home, or the original appraised value, whichever is less. So if the original price was $100,000, and the buyer puts 15% down ($15,000), once they pay the next 5% ($5000), PMI goes away.
I'm not confused at all. If you don't start the loan with a 20% down payment which is the scenario being discussed you do not get pmi removed automatically when you get to 80% ltv. I'm far from confused and maybe you should have read what you linked before just copying and pasting a link. This is directly from your source
Quote:
Once you've committed to paying PMI, you'll usually have to keep it for at least two years.
If your home has appreciated enough to give you 25% equity after two to five years, you can cancel the coverage. After five years, you just need 20% equity to ditch it.
In either scenario, you'll need an appraisal, ordered directly by your lender, to substantiate your home's value.
The federal Homeowners Protection Act requires lenders to cancel PMI automatically when you've reduced your balance to 78% of your home's purchase price, even if its market value has declined since then. (This rule doesn't apply if your loan was designated "high risk" when you took it out.)
I'm not confused at all. If you don't start the loan with a 20% down payment which is the scenario being discussed you do not get pmi removed automatically when you get to 80% ltv. I'm far from confused and maybe you should have read what you linked before just copying and pasting a link. This is directly from your source
You are wrong. The very text you posted proves it. Read the last paragraph carefully.
"The federal Homeowners Protection Act requires lenders to cancel PMI automatically when you've reduced your balance to 78% of your home's purchase price, even if its market value has declined since then. (This rule doesn't apply if your loan was designated "high risk" when you took it out.)"
There is no requirement for an appraisal in that scenario. PMI is automatically cancelled.
Last edited by Nolefan34; 10-31-2016 at 10:56 AM..
Only on recent (I can't remember the exact time period but maybe after 2010?) FHA loans is PMI required for the life of the loan. Even then, if someone were to refinance to another loan and they're at 78% LTV, they wouldn't be on the hook for PMI.
You are wrong. The very text you posted proves it. Read the last paragraph carefully.
"The federal Homeowners Protection Act requires lenders to cancel PMI automatically when you've reduced your balance to 78% of your home's purchase price, even if its market value has declined since then. (This rule doesn't apply if your loan was designated "high risk" when you took it out.)"
There is no requirement for an appraisal in that scenario. PMI is automatically cancelled.
You are now talking about something different. Originally you were discussing 80% ltv. I'm aware of the federal homeowners protection act however that's not what you were discussing as you were talking about 80% ltv which most lenders would require an appraisal
Only on recent (I can't remember the exact time period but maybe after 2010?) FHA loans is PMI required for the life of the loan. Even then, if someone were to refinance to another loan and they're at 78% LTV, they wouldn't be on the hook for PMI.
No nolefan is not correct because he/she was discussing paying down a loan to 80% ltv. If you refied and you were at 78% ltv that's no different than putting 20% downpayment on a new loan, it's the same thing
Now is that 15% strictly in a 401k/retirement vehicle? I'm trying to make sure I separate the 15% from other things like stocks. I know the short term lifestyle things (home improvements, vacations) should be outside that 15% but what about other investments?
Thanks (sorry to be pest)
In theory, it can be outside the 401k. The only problem with that, besides the lack of a tax break, is that you'll be tempted to use it for something other than retirement. So, in practice, I'd say that's a bad idea, unless your income is high enough that you're maxing out all your retirement accounts (401k, Roth IRA, etc.).
You are now talking about something different. Originally you were discussing 80% ltv. I'm aware of the federal homeowners protection act however that's not what you were discussing as you were talking about 80% ltv which most lenders would require an appraisal
Nope. Wrong again. Do you not understand that paying down 20% of the loan is the same thing as having 80% LTV? This is very simple stuff.
You need to move onto another topic because you clearly are clueless about this. You have not read the material and have minimal understanding of this topic.
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