Can a Town Revaluation Appraisal Be Used to Remove PMI from Mortgage Payments? (real estate)

[zhelder]

OK, maybe this question is better suited to the Real Estate Forum, but since we have some real estate geniuses here too…

I got a notice that my town is doing a revaluation. I know I’ve built up some pretty good equity in my house… to the point that if my house appraises for close to what I think, I’ll be very close to an 80% LTV ratio.

But could the town’s appraisal be used as proof of the LTV ratio to remove PMI, or do I have to pop another $500 or so to get my own? I couldn’t find the answer on the Int O’ Net for this one, but figured some of y’all might know. My gut is telling me no, I can’t use the town’s appraisal, but ???

Thanks for any info…

[Mightyqueen801]

Originally Posted by zhelder

OK, maybe this question is better suited to the Real Estate Forum, but since we have some real estate geniuses here too…

I got a notice that my town is doing a revaluation. I know I’ve built up some pretty good equity in my house… to the point that if my house appraises for close to what I think, I’ll be very close to an 80% LTV ratio.

But could the town’s appraisal be used as proof of the LTV ratio to remove PMI, or do I have to pop another $500 or so to get my own? I couldn’t find the answer on the Int O’ Net for this one, but figured some of y’all might know. My gut is telling me no, I can’t use the town’s appraisal, but ???

Thanks for any info…

As far as I know, your PMI remains tied to the value of your house as determined at the time you got the mortgage, so it's still going to depend upon how much of the mortgage you have paid off. I don't think they care what your town's assessment on your property will be. That's not the same as an actual appraisal.

When you refinance, you have to have an actual appraisal done. They don't go to the town and ask what the assessment on your property for tax purposes is, so I don't see how they would use that to drop your PMI.

By the way, when I got to where I thought my LTV was down to 80% or 78% or whatever the requirement is, I reached out to a loan person at the bank and asked if they could drop the PMI. I suspect they might not have done it automatically if I hadn't initiated the conversation.

I think you might have to refinance to get rid of the PMI. I refinanced a year or two after I got rid of the PMI, and since property values had gone up, I was holding my breath hoping the appraisal would come back what I needed it to be to get a conventional loan, and it did.

Might be worth a call to talk to a loan officer and find out if there's something you can do to get rid of the PMI.

[zhelder]

Originally Posted by Mightyqueen801

As far as I know, your PMI remains tied to the value of your house as determined at the time you got the mortgage, so it's still going to depend upon how much of the mortgage you have paid off. I don't think they care what your town's assessment on your property will be. That's not the same as an actual appraisal.

When you refinance, you have to have an actual appraisal done. They don't go to the town and ask what the assessment on your property for tax purposes is, so I don't see how they would use that to drop your PMI.

By the way, when I got to where I thought my LTV was down to 80% or 78% or whatever the requirement is, I reached out to a loan person at the bank and asked if they could drop the PMI. I suspect they might not have done it automatically if I hadn't initiated the conversation.

I think you might have to refinance to get rid of the PMI. I refinanced a year or two after I got rid of the PMI, and since property values had gone up, I was holding my breath hoping the appraisal would come back what I needed it to be to get a conventional loan, and it did.

Might be worth a call to talk to a loan officer and find out if there's something you can do to get rid of the PMI.

Thanks, Queen… my PMI isn’t much, less than $90 a month, but I was curious.

As far as the refinance, I did it a year ago. Went from 4.25% to 2.75%, which was a delightful reduction in payments. With mortgage rates climbing now, another refinance is out for a while. And at 2.75%, maybe permanently.

[Mightyqueen801]

Originally Posted by zhelder

Thanks, Queen… my PMI isn’t much, less than $90 a month, but I was curious.

As far as the refinance, I did it a year ago. Went from 4.25% to 2.75%, which was a delightful reduction in payments. With mortgage rates climbing now, another refinance is out for a while. And at 2.75%, maybe permanently.

Yes, mine was $79 or something, down to $67 or so by the time I got rid of it, but still. I didn't like paying it, but it was the only way I was able to buy my condo because I didn't have any money when I did and had to get an FHA.

2.75% is good. I refi'd from 5.25% to 3.25%, and I was happy about that. Plus I went from 30 years to 15, and I believe I can have it paid off in six or seven.

[midnight_thunder]

Tough question. Did the town just do a reassessment, and is your value actually based upon that reassessment value? Or is the assessed value out of whack and your town just adjusts the ratio to increase taxes?

If your town was recently reassessed, and your assessed value looks close to what you think is the actual value, see if the town ordered an appraisal on your property. Make an OPRA request for any documents going toward the valuation of your property.

Your bank requires an appraisal from a licensed appraiser to consider removing PMI. You might be able to use an appraisal ordered by your town to revalue your property, if such a document exists. I do not know how towns do reassessment, but when towns purchase property/portions of property, they are required to obtain appraisals. The law might be the same for reassessments.

If your town does not have an appraisal for your home, know that appraisals cost $300-500. If your annual PMI is more than that, and you think you'll get over 20% equity after valuation, hire an appraiser, present the appraisal to the bank, and enjoy no more PMI.

[Swamp_Yankee]

The actual answer is, its up to your mortgage company-you're not going to get anything definitive here. I ordered my own appraisal (about $450) and sent that along with documentation of major improvements (new pine plank flooring throughout, updated kitchen, updated HVAC, etc...) and PMI was removed within 30 days of submitting.

[lsiberian]

You should refi. Then you will get a better interest rate too.

[Mightyqueen801]

Originally Posted by lsiberian

You should refi. Then you will get a better interest rate too.

Did you not read Post No. 3? I don't think they'll get much better than 2.75% to make it worth the cost.

[HudsonCoNJ]

Originally Posted by Mightyqueen801

Did you not read Post No. 3? I don't think they'll get much better than 2.75% to make it worth the cost.

Yeah, that’s why I just paid my PMI in full at closing when I bought last year. It’s not realistic to expect there to be an opportunity to eliminate it by refinancing at a lower rate in the future.

[Mightyqueen801]

Originally Posted by HudsonCoNJ

Yeah, that’s why I just paid my PMI in full at closing when I bought last year. It’s not realistic to expect there to be an opportunity to eliminate it by refinancing at a lower rate in the future.

When I bought, you could eliminate the PMI when you got to a certain LTV. I think it was either 80% or 78%. I had started paying extra on my mortgage when I finished eliminating my other debt, and I was pretty sure I was there, so I reached out to the mortgage people, and sure enough, they dropped it.

A year or so after that, I refinanced. My problem was that I bought my condo in 2010, and then it dropped in value. I couldn't refinance until comps went back up, and all of a sudden, they did. I was holding my breath waiting for the appraisal, though. It had to come in at a certain amount, and when it did, it was $10K over that figure, so I was good.

That 2% interest reduction made a difference in how much is going to principal.