We are about to close on a home (conventional loan) we are putting down 10%, great credit scores, we just got the appraisal. We are buying the house for 325k and the house appraised for 410k. We asked if our lender could remove PMI before closing but she said that is not allowed but we cannot get a clear answer out of her for anything on why. Can someone explain this to me!?
Posted by Hopeful-Ad6275
4 Comments
your lender is being dumb – with that much equity from the appraisal you should be able to get the pmi removed since you’re effectively putting down way more than 20%
Your ltv is calculated using the purchase price or the appraisal….whichever is Less.
FYI for removing PMI based on value….
1) not allowed during the first 2 years
2) 25% equity required years 2-5, 20% thereafter.
With that equity, could you do a 10+10?
here’s a link to the guidelines for PMI removal after purchase.
[https://servicing-guide.fanniemae.com/svc/b-8.1-04/termination-conventional-mortgage-insurance](https://servicing-guide.fanniemae.com/svc/b-8.1-04/termination-conventional-mortgage-insurance)