Help with LTV and PMI questions (loans, interest rate, rate, refinance)

[need2knowplz]

Can y'all help me here:
Sales Price of property: $200,000
Appraised value: $249,000
Down Payment: $0

Does the buyer still need to pay PMI? Is this considered a loan-to-value ratio of 80% (my math)? In other words if you buy a distressed property as long as the price of the property is lower than the appraised value by let's say atleast 20% then is it true you do not have to put any money down to avoid paying PMI? Or to get the lower interest rate loans that require a LTV of atleast 80%?

[renriq02]

yes because the lender will ALWAYS use the lesser of the purchase price or appraised value

they will use 200k as the value

Originally Posted by need2knowplz

Can y'all help me here:
Sales Price of property: $200,000
Appraised value: $249,000
Down Payment: $0

Does the buyer still need to pay PMI? Is this considered a loan-to-value ratio of 80% (my math)? In other words if you buy a distressed property as long as the price of the property is lower than the appraised value by let's say atleast 20% then is it true you do not have to put any money down to avoid paying PMI? Or to get the lower interest rate loans that require a LTV of atleast 80%?

[VickiMBA]

Remember that lenders WANT you to have PMI because it limits their risk exposure, so when you're purchasing they will use the lesser value, as renriq02 indicated. However, if you decide to refinance or can prove an LTV of 80 or lower later on then you should be able to request removal of your PMI.