Submitted by Oskeros t3_z8yelg in personalfinance
MarcableFluke t1_iye5o87 wrote
>I thought under the law they have to remove it, when asked, when at 80%.
Based on the original value of the home, not based on the current value. There is no law requiring lenders to take into account appreciation since the loan originated.
>You can ask to cancel PMI earlier if you have made additional payments that reduce the principal balance of your mortgage to 80 percent of the original value of your home. For this purpose, “original value” generally means either the contract sales price or the appraised value of your home at the time you purchased it, whichever is lower (or, if you have refinanced, the appraised value at the time you refinanced).
Emphasis mine.
[deleted] t1_iye8hq5 wrote
Not true, the bank will reappraise based on current market value.
Source: We removed PMI this way, it was a very simple process. The lender was Chase.
MarcableFluke t1_iye8srs wrote
I didn't say it wasn't possible, I said it's not required by law for them to do this. If you look further on that link, that part is covered:
>Loan investors, including Fannie Mae and Freddie Mac, often create their own PMI cancellation guidelines that may include PMI cancellation provisions beyond what the HPA provides. But these guidelines cannot restrict the rights that the HPA provides to borrowers. For example, the HPA does not contain any requirements for a loan’s tenure before a borrower may request cancellation or be eligible for automatic PMI termination (known as a “seasoning” requirement).
[deleted] t1_iye8zs0 wrote
You said it’s based on the original value, which is not true. Most banks will reappraise for a small fee. That reappraisal value is used to remove PMI.
MarcableFluke t1_iye99n0 wrote
I said based on the original value is what is required by law. Look at the part of the OP that I originally quoted.
Based on the current value is dependent on the lender, which typically means the big loan investors requirements.
[deleted] t1_iyea735 wrote
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