Mortgage Insurance

[rjkiegel]

I have a mortgage through a local Baltimore bank and recently called to determine how much principal I would have to pay to reach the 80% LTV ratio in order to drop the PMI. I was told that the ratio is based on the original loan amount regardless of any increase in property value. For example, if the original loan was for $100,000, I would need to pay the principal down to $80,000 before the PMI could be dropped. However, I know that my property value has increased and that the outstanding principal on the loan may be well under 80% of the current value. I would be very willing to pay for an appraisal if I knew the bank would accept it. What are the State and Federal laws regarding this and how should I go about resolving this situation? Thanks to anyone with advice.

 

[ljmvann]

Banks make alot of money on PMI, and they try to make it difficult for anyone to drop it from my understanding. My friend had a difficult time getting her bank to drop the PMI on her house after she was down to 80% of her principle. She had to have a new appraisal (and even then her bank gave her a hard time.) I have heard there might be a newer law relating to your situation, but you would probably do well to contact an attorney specializing in real estate.

I wonder if you could refinance and get rid of the PMI that way?

Please note that I am not an attorney of any sort. Good luck to you.

 

[HomeGuru]

www.pmirescue.com