PMI Removal from Mortgage

[yankebabie]

Don't understand the math of the LTV was hoping someone could assist me. Looking to have PMI on our mortgage removed. Mortgage company said that we have to have an appraisal done first at our expense, which is fine. So if I paid $159,000 for my house and I owe $131,500 what would my appraisal have to come in at in order to have 20% equity as required to have PMI removed ahead of schedule. Thanks for you help, greatly appreciated.

 

[iheartpeterpan]

Anything greater than $164,375.

 

[mrsklamc]

Check with a credit union. If you have good credit you may be able to refi w/o pmi even if your appraisal comes up short.

 

[Riverhill]

$157,800.00 just add 20% to what you owe on your home. In order to have 20% equity the home has to be worth 20% more than you owe. As long as you are paying for an appraisial depending on your current interest rate you may want to refi to get a lower rate.

 

[Claire&TheBoys]

It would have to come in at least $164,375.

I used proportions, so that:

80 = 131,500
100 x -- this x should be under the 131,500 but it's not showing up that way

Then, 80x = 131,500 x 100
And, x = 13150000/80
So, x = 164,375


We had PMI removed from the mortgage on our first home, after we'd done a cash-out refi to build an addition, getting 90% of appraised value. After the addition was completed, we initiated the process. The mortgage company selected the appraiser (and he was from a nearby city and not that familiar with ours) and we paid for the appraisal. It came in high enough, but lower than we expected because the appraiser used comps that were in neighborhoods that really weren't comparable to ours. And be prepared that appraisers these days are being very particular and conservative with their valuations.

Good luck!

 

[yankebabie]

That's awesome! Think we can easily hit that mark, put in brand new kitchen last year with all the bells and whistles and recently remodeled both bathrooms. Thank you so much for your help!!

 

[SaraJayne]

That's awesome! Think we can easily hit that mark, put in brand new kitchen last year with all the bells and whistles and recently remodeled both bathrooms. Thank you so much for your help!!

Appraisals are typically done only from the outside (at least they are here), so your new kitchen probably won't matter.

 

[Muushka]

Appraisals are typically done only from the outside (at least they are here), so your new kitchen probably won't matter.

We were appraised about 6 years ago and they came in and measured all of the rooms and took pictures. In NC.

 

[msmayor]

Appraisals are typically done only from the outside (at least they are here), so your new kitchen probably won't matter.

Not really true. Appraisals involve measuring interior room dimensions and 'counting' how many bedrooms/bathrooms. An appraiser needs to be inside in order to do that.

Don't expect kitchen and bathroom remodels to increase the value of your home for appraisal purposes. It won't really matter that much, because every home should have a kitchen and some bathrooms. The 'newness' of the fixtures won't really come into play...only the actual features of the rooms when comparing to like properties.

For example, a bathroom with a tub/shower combination may be worth more than one with only a shower. It won't really matter how new the tile is.

 

[yankebabie]

But I would think that going from a 1940's kitchen that was 10x10 to an open kitchen with stainless steel appliances, hardwood floors, granite countertops and custom cabinets would definitely increase the value of my home, no?

 

[mrsklamc]

But I would think that going from a 1940's kitchen that was 10x10 to an open kitchen with stainless steel appliances, hardwood floors, granite countertops and custom cabinets would definitely increase the value of my home, no?

No, it doesn't work that way.

 

[yankebabie]

So why all the real estate shows on tv say that kitchen and bathroom remodels increase the value of your home?

 

[mrsklamc]

So why all the real estate shows on tv say that kitchen and bathroom remodels increase the value of your home?

They won't affect the appraisal value; they MIGHT minimally increase your resale value...or not if a potential buyer doesn't like the style. For the most part a remodel is only worth it in this economy if YOU are going to enjoy it, and if you recoup some costs on the sale it's a bonus.

Plus, guess who sponsors the kind of show that says it's going to increase your home value? Lowe's, Home Depot, etc.....

 

[Muushka]

I also find it hard to believe that an updated kitchen would not appraise for more than an old one?

 

[mrsklamc]

Someone else already explained...fixtures do not affect appraisal value.

 

[yankebabie]

I disagree that it would not effect the appraisal. I am not saying that it makes the whole difference but feel that it is a piece of the whole pie. Impossible to go from a 1940's closed in kitchen with curled up linoleum floor, formica countertops and fiberglass type cabinets and not have a new kitchen increase the value of the home.

 

[mrsklamc]

I disagree that it would not effect the appraisal. I am not saying that it makes the whole difference but feel that it is a piece of the whole pie. Impossible to go from a 1940's closed in kitchen with curled up linoleum floor, formica countertops and fiberglass type cabinets and not have a new kitchen increase the value of the home.

You disagree? That's not my opinion, it is a FACT that that is not how appraisals work.

 

[msmayor]

I disagree that it would not effect the appraisal. I am not saying that it makes the whole difference but feel that it is a piece of the whole pie. Impossible to go from a 1940's closed in kitchen with curled up linoleum floor, formica countertops and fiberglass type cabinets and not have a new kitchen increase the value of the home.

Except you need to remember that when a property is being appraised, it is only being compared to comparables on paper. An appraiser is not examining the interior of all the comparables he/she is using to determine value...its a comparison of square footage, BASIC features and rooms and property/location.

An appraiser can't tell if any of the comparables he/she is using for the appraisal has curled linoleum or new tile. All he knows is that it has serviceable flooring.

 

[mrsklamc]

Look at it this way- in most cases people are taking out a loan for 30 years. If it's something inside the house that is likely to change over the course of 30 years, like countertops, appliances, etc- it's not going to count in the appraisal.

 

[mrsklamc]

And to be fair, I have seen people on the DIS swear to things they "know" that aren't true...so if you don't believe us, look up any appraiser's office in your area, call and ask.