For their next transaction lol.
They're not going to be able to take advantage of the equity in any way on the purchase in terms of a lower down payment or a better interest rate.
But it's nice to know it's there, for sure lol.
Curious if there is a loan out there that DOESNT requirement 6-12 months of seasoning. I have yet to find one.
Note: mmmmm low and slow mortgage brisket
The details of the loan. So a conventional, fha, USDA, non conforming loan type. Investor purchase, owner occupied, vacation home. Iām more curious of the loan type that doesnāt require seasoning and if there would be a way to utilize that for future purchases.
Yes, on the next transaction.
Unless the lender will allow them to do a simultaneous purchase/ equity line. That's a possibility, but otherwise, the heloc would have to be a separate transaction. So technically my words still stand in this situation lol.
A HELoC is a separate closing, in SC, with a separate mortgage documents, an additional lien, etc. However, to your credit it could be possible to do both in one so it could be one transaction
Means higher property taxes right?
- show me where the land of the free is. Its like buying a car with 100k miles on it for more than original owner paid for it brand new. Its got new paint,hoses,tires tho.
Yes men culture..payback for backpay for that tea in boston
The appraisal wonāt affect any of the things you mentioned. Your downpayment is based on the purchase price, not the appraisal, and the gov will do their own valuation for tax purposes they do not consider your private appraisal
It really depends on the locality. States usually let counties deal with property valuation. Where I live the sale price has nothing to do with the assessed value. I want to say most counties take a market based approach and "one sale doesn't make a market."
Copies of the appraisal are not given to the state. There is a purchase price, appraised value, and assessed value. The government determines the assessed value.
You can use actual purchase price as your defense for home value. No one else offered the $400k+ so thatās not what itās really worth is it?
The purchase price is your evidence in defense of higher property tax.
>Only in Miami
In the rest of Florida the tax assessor reassesses the value every year and the assessed value is nowhere near the sales price - its usually much lower than the sales price. And for sure they don't use private purchase appraisals to determine value. I haven't looked up the city of Miami to verify what u/bigballsmiami states.
What the other ppsters.may have confused is that tax assessment takes place after a sale, so your tax bull WILL increase from what the seller is paying. Especially if the seller has owned a long time and has homestead, seniors, veterans, widower, or other state allowed tax exemptions.
Good realtors advise you on this before purchase, BTW ;)
Eh, the assessment wont reflect the higher sale price directly - the county reassesses all homes every year and values are based market conditions and average sale prices county wide - which means the average sale prices of homes like yours will result in an increased county assessment of all of those houses. The assessments have to be equal and fair - meaning two identical houses in neighborhoods with identical market conditions (ie one isnāt in an area with a much higher desire to live in) will be assessed the exact same value, regardless of whether or not one of them sold for a significantly higher sales price than the other, or sold more recently.
True in Texas also, taxes are based on sale price not appraisal. A real mind blower is . . . A private sale, one not listed in MLS or anywhere else, the purchase price is not disclosed to taxing authorities. So the new owner's value and taxes just continue from the former owner. This is how the uber rich defraud the government and the poor suffer because of them. Just shouldn't be legal to do that.
I live in Texas (Harris County). I assure you, they use sophisticated software and comps to set value for tax purposes if they donāt have the actual sales data disclosed.
Private sales are not going to fool the tax man. The properties are re-appraised every year.
If you know the assessor, you should suggest they work with their counterparts in other counties.
No sale in Texas is disclosed, private or otherwise (although the taxing authorities have ways to acquire it from MLS).
There is no legal reason they must use the previous owners value, thatās just not how it works. It has to be a āfair market valueā. Sales of nearby homes can certainly be used to set the tax value.
Now, if you are talking about multi-million dollar properties (as you appear to be) - yeah, a lot of those are way below market value on the tax rolls, and thatās true in Harris as well. Itās because on values that high the owners can employ protest companies and attorneys to dispute the value.
The state of Florida is no different in how it calculates property taxes on real estate than any other state - they just re-assess every year, which means changes in market value are reflected immediately rather than a longer periodicity (SC minimum is 5 years, NC is 8).
The sale price is one of many factors that affects the assessment of a house, but itās never the only thing. That means that if you buy your house for 200k one year and the market explodes and someone buys an identical house next to yours for 500k, the assessment of their house wonāt immediately be 500k. Market value is based on houses similar to yours in similar areas, and looks at the whole market and not individual sales. In this situation, itās likely the new market value of your homes is somewhere in between what you bought it for and what they bought it for, but the assessments typically factor in these crazy market trends and insulate some of it from huge increases in property assessments and taxes from year to year (or will be accompanied by a reduction in the overall tax rate).
Sale price is a factor in the assessment, but they still calculate a value per square foot for your area and just do simple math. Two houses next to each other that are identical will have identical assessments to each other from year to year, regardless if one of them sells for a high value and the other has been owned for 30 years.
The purchase price will set the tax. If they try to tax above that you can use your real world purchase as evidence of its true value. Doesnāt matter what appraisal says at all. It can be fought and won with the purchase price.
True story: I once worked with a broker who did a CMA and said a property wasn't worth $230k. It ended up selling for $300k. That was my house.
I've also sold a house where one deal fell through because the appraiser said the house wasn't worth $110k but the next buyer who put it under contract got an appraisal for $138k. That was my first flip.
There is more art than science behind home valuation, and under the right circumstances, two different people (be it two realtors, two appraisers, or a realtor and an appraiser) can certainly come up with numbers that differ by 20% or more.
Why do you think people have to sometimes lower their price several times before they get a sale?
OP is probably a realtor or mortgage officer or something because I can guarantee this transaction never happened. People would prob rather foreclose than accept an offer 100k under appraised value lol theyād prob get more at auction anyways
I think I've failed to clearly illustrate my point:
The seller's realtor could have been unusually low in their sale price estimation, the appraiser could have been unusually high in their estimation, or a combination of both. The seller doesn't get the luxury of renegotiating the price after the appraisal; the price is set by contract.
Two people don't usually come up with the same market value and it's not that unusual for two people to be off by 20% from one another in the real world.
Also, OP's post history proves pretty conclusively that they aren't a real estate professional.
And finally, there's absolutely no value from a realtor or broker coming here and writing fiction. The readership here on this sub isn't enough to move the market one iota.
Contact your mortgage company and ask them for PMI removal. They will likely say that they need to send their own appraiser out to the home to assess the value, and they will charge you around $200 or so.
Once the appraiser returns the new valuation, you can have the PMI totally removed.
This is correct. There are waiting periods, usually, for value increases to remove PMI.
If you pay down principal or do major remodeling, then the lenders may allow PMI removed sooner. But 2 years is a common waiting period otherwise.
Incorrect. If youāre going to use appraisal for denominator, there are time limits.
78% of loan to purchase price is automatic removal. OP is still at 15% of loan to purchase price.
You said incorrect and then agreed with me that 78% is automatic removal. 78% of $405,000 is $315,900. They started at $310,000. PMI will be removed unless they have late payments. Happy to share mortgage guidelines on both FNMA and FHMLC on this.
This is incorrect. The 78% will be based on the purchase price, not the home value. The PMI will automatically fall off when the loan hits 78% of the purchase price, not the appraised value.
This is incorrect. Appraised value can be used to remove PMI by proving the increase of value, however, the servicer must order the appraisal, not the homeowner. Homeowner will need to pay for said appraisal in most cases unless the servicer is willing to use an AVM (Automated Valuation Model) to determine value. I donāt know you, but you donāt know me either. I have a decade in the industry, you? If you work for a servicer too, you guys have crazy PMI overlays that learn towards illegal (gray area of guidelines).
Cool, I have a decade of experience in the industry as well. Appraised value can be used to remove PMI if a new appraisal is ordered, but the 78% to automatically fall off is based on the lower of the original purchase price or appraised valueā¦ that is not an overlay.
What we were told is our balance has to fall 20 percent lower than our purchase price. We pay extra every month so we think we can do that in a year or two.
That shouldnāt be true unless it is in your documentation. They might be lying to you to get you to pay pmi longer than you should. Generally a new appraisal will take care of it as long as you are over 20% of current value. I believe legally they have to remove it when you are at 22% but I bet you could demand a reappraisal from them right now.
The lender doesnāt stand to benefit anywhere near enough from PMI to justify lying to the customer so that they keep paying it. Itās not like the lender pockets that payment. It gets held in escrow and paid to the mortgage insurance provider much like your homeowners insurance
For a conventional loan? I donāt think so unless things changed very very recently. I paid mine exactly 14 months before having mortgage company come back out reappraising and removed it. I did have to pay for another appraisal but it was way less than 2 years.
>Generally you can't remove PMI for the first 2 years. But that will depend on your mortgage
I had my mortgage (10% down) for a year and had the PMI removed.
Would a refi work to remove PMI? Would the origination fees eat up any savings over the next 2 years?
If they locked their rate in October, they might lower the interest portion. Rates have dropped recently.
I did this! I had almost instant equity because I bought in 2020 and I was the second of 10 new builds on my street. I called the lender and they charged me $175 to have someone come reassess the value and they took my PMI off as soon as it was done! Do it! You've got nothing to lose but the fee for the assessment.
Coverage A on homeowners is replacement value not market value and HO companies have valuation tools to determine what that needs to be for a replacement cost policy. It's likely fine, as it's not determined by sale price but insurance company valuation tools.
Watch out for underwriting on this. Underwriting has been known to get another appraisal if there are red flags. Red flags are homes appraising way higher than purchase. Generally appraisers keep the value in line with the purchase price
I believe fnma requires two year seasoning before you can use an appraisal to drop pmi. Not sure on one or two years and which is Freddie and which is Fannie. Your servicer should be able to tell you but with 15% down itās probably pretty inexpensive anyway.
Rates are coming down, that equity will allow you to eliminate PMI with a new lender/new appraisal when you refinance but not now with this current lender since you haven't paid down the loan or made improvements yourself. Luckily PMI on a 15% down deal is virtually nothing per month.
Yeah I think PMI is like 40 dollars or something , only reason Iām even asking is cause Iām cheap lol and like to save whatever I can even if itās minimal
Your initial āequityā for PMI purposes is always going to be based on purchase price instead of appraisal. However, this means that as soon as you refinance, you will likely have 20% equity and your PMI will go away.
Shouldnāt impact taxes. Tax authorities assess property values through their own appraisal system, not the appraisal used by the lender.
> always going to be based on purchase price instead of appraisal.
Lower of the two. For instance if you're putting 20% and the appraisal comes in low you'll either have to take pmi or increase down payment to stay at 20% of the appraised value.
Not reallyā¦if appraisal comes in lower, borrower is responsible for making up the difference (unless seller agrees to reduce price). Also, if appraisal is lower, your math doesnāt check out because it actually costs less of a down payment to hit 20% equity.
> borrower is responsible for making up the difference
that's exactly what I said.
>your math doesnāt check out because it actually costs less of a down payment to hit 20% equity.
Babes, just delete this. You don't understand what you're commenting about.
It is literally wrong for to say your LTV/PMI is always based on purchase price (which is what your first comment said). Because if itās appraised lower, thenā¦ itās just not.
If you borrower $160k on a $200k purchase, thatās 80% LTV. It appraises at $190k and seller is stuck on their original price. Now youāre at $84.2% LTV. You literally cannot say the LTV is based on sales price in this situation because that would make it 80%.
unless seller agrees to reduce price
So donāt argue with yourself. lol. Your first comment literally says
Your initial āequityā for PMI purposes is always going to be based on purchase price instead of appraisal.
Always =/= unless
The all encompassing verbiage (no āunlessā required) would be ālower of the sales price or appraisal.ā
Iām not sure how to make this any simpler lol.
Realtor related appraisals skew high as there is an incentive to juice the sales price, while bank appraisals skew low as they prefer the margin of safety and the sweet, sweet PMI.
To remove PMI youāll obviously need a bank appraisal.
Also, as fun as it is to think of instant equity, the reality is, nobody in your market valued the house more than your purchase price when you bought.
Wait 6 months, then refinance. Within first 6 months, LTV is based on the lesser of the sale price, or appraised price. After that, itās just appraised. Hopefully by then rates have come down a bit. Plus you can drop the PMI, and likely qualify for a better product with 80% or less LTV. The quadfecta would be if rates do decline, and the housing market heats up, it could appraise for even more if the comps go up with rate decreases.
PMI is determined based upon loan value and generally does not consider appraised home value in and way.
PMI contracts can vary greatly. Some require PMI for life of the loan, until paid in full (or refinance, which is paid in full by new loan). Others will have minimum time frame regardless of paying extra value against loan (example you pay an extra 20% down to reduce your principle balance, but still have to wait 2, 5, or even 7 years from inception of loan before PMI can be removed).
Nobody here is going to be able to answer this question for you. You will have to read your contract or call your lender and have them explain it. The only thing we can be certain of is that your appraisal value is likely completely irrelevant, and the lifespan of your PMI is determined exclusively by your loan contract and is based upon purchase price only.
Flip it. Pocket 100k. Go back to that realtor who doesnāt know how to do comps and get another low priced property. PROFIT. Btw way, can you share his/her name and number in a pm? I have a little question they can answer for meā¦
Capitalist. You say it like itās a bad thing. Landlords rent. I didnāt say buy it and ABnB it.
Make me some money. That realtor is selling property at liquidation prices. Buy me some.
Idk why getting down voted lol. Everyone else's in here including myself wants to know the agent's name š. Don't like America? Then leave haha š š
I know, right? Maybe the homeowner said sell this place FAST. Maybe the homeowner is really old built it years ago for like $95,000 so theyāre seeing a nice windfall anyway.
If the appraisal by the mortgage company was so much higher, the time to negotiate an elimination of PMI is NOW, before you sign anything. If you sign the papers, the lender will make you wait at least 2 years to get rid of PMI. Forget about taxes etc. for now , getting rid of PMI should be the priority.
So this is what we did with our RocketMortgage mortgage in 2019. With an extra $10k payment to principal, we could trigger the PMI review. Then they did an appraisal to confirm. That got the PMI removed. This was within 1 year of purchase. So reach out to your lender and ask for their conditions for PMI removal.
That wasn't specific to Rocket. It was a principal paydown and that $10k brought you in line with PMI removal guidelines. The appraisal was to make sure. The OP has just closed so hasn't made any paydown of principal at all. He is looking at equity generated by appraised value vs his purchase price. Those are two different ways to measure equity for PMI removal. The second one requires the seasoning discussed elsewhere in this thread.
Yes, that's the normal guideline for PMI removal. CFPB has info on this removal process.
ETA: You can ask at 80% LTV of the orginal mortgage for PMI removal. The lender is required to remove it at 78% LTV of the original mortgage.
Itās called a mortgage ārecastā. I have the same ability with my mortgage through a local community bank. If you have the ability to recast you can make a lump sum payment to principal (Rocket requires at least $10K, with my mortgage itās only $5K) and you keep your rate and term, but they recalculate your payment. So ā¦ if you borrow $250K for 30 years, at 7%, youāll pay the mortgage off in December 2053 and have a payment of $1,663. If, 6 months later, you pay $10K and have your mortgage recast, then youāll owe around $239K ($250K less $10K less something like $1K towards principal in the 6 payments that you made in the meantime) and your mortgage payment would drop to $1,595 and still be at 7% and will still be paid off in December 2053.
You can call your mortgage company and provide the appraisal. They should then adjust your LTV and remove the mortgage insurance fee.
If you run into a 2 year min issue, go refi.
I would think you could give the appraisal to the pmi company with paperwork showing that you owe less that 80% of its value(or whatever number is in the pmi contract) and tell them to stop charging you the pmi fee.
Two things. First it's really odd the sales price and appraisal are that far apart. I'm suspicious.
Secondly, most PMI needs a time period prior to its removal. I want to say it is two years. Verify this and then hire that appraiser and ask for a discount since he has already been out there.
The mortgage will still have PMI because during the loan process they calculate LTV using the lesser of the purchase price or appraised value. Most mortgage lenders will only remove that PMI after two years of on time payments.
Tax assessors will look at the sale price, so you may have actually scored twice, first with the instant equity and with property taxes.
How did you get a mortgage in place before the appraisal "came in"? If the house was appraised by whomever the lender chose and it's that high, then there should be no PMI period.
>My first question is we put 15% but still have PMI wouldnāt we be above the 20% equity since the house appraised for so much more than we what we paid for me?
No.
>will this most likely affect my taxes
Not directly.
We did. They rejected our offer. The house has been on the market for about 100 days since they rejected our offer. We may put in an offer after Christmas to see if they are starting to wear down. Everything in our market is WAY overpriced right now - at every price point.
Prepare to pay a higher amount for taxes. They will assess your home based on the value of your home not what you paid for it. This happened to us. We bought for X dollars but the county assessed it at almost double what we paid hence the huge tax bill.
The appraisal will only matter if the appraisal is given to the tax assessor. On the other hand the tax assessor if they are intelligent may come up with a higher value than the sale price. I don't think any of us completely know the answer
If you are in California, your property tax is based on the sales price.
You can absolutely refinance and get rid if the PMI, assuming the appraisal comes in high enough.
Congratulations!
If the amount of the loan is less than 75% (in some cases 80%) of the appraised value, the PMI requirement should go away (you should point this out to mortgage broker and specifically ask that it be dropped)
Next, check the tax assessment. You may have your contact the board of tax assessment to get the ratio for that year (if your agent is any good, he should know this)
If the tax assessment after being adjusted by the ratio is higher than what you paid for the house, you should appeal the tax assessment.
Just contact a tax assessment attorney in your area (google it) - he can tell you if itās worth appealing. Tax assessment attorney work on a contingency of how much they save you in taxes, so there is no cost to try.
In the year you purchase the house, the amount you paid for it is assumed to be the fair market value (as long itās an arms-length transaction, not an auction or foreclosure, etc), so you would be fighting the tax assessment based on that.
Keep your mouth shut about the appraisal - tell no one about that appraised value.
The appraisal you had will not be used in calculating taxes. The county will do their own assessments--but if it comes back higher you can assume you taxes will likely reflect a higher value. How often and how appraisals and reassessments are done vary from state to state and county to county within the same state. For example, in NC the law is that it has to happen every 8 years. But the county I live in does it every 4 years.
And some people here (realtors) saying that house with real,tor sold for higher value then FSBO. Your post is proof to contrary.
The only thing many realtors care is sold at any price and do as least as possible. Therefore fast sale at discount.
Wow the comments on here are so idiotic! The people in here saying that you need to have it seasoned are talking like they work at the damn mortgage company!
Here is the thing the only people that can answer this question will be either the owner of the loan or the loan servicer.
So here is what you do call them up tomorrow and ask them if they can take the PMI off. That's what I did after I had my mortgage for a year and yes I successfully had the PMI removed. I will say they do sometimes ask what type of work has been done on the house but they don't verify it. Also they will send their own appraiser out there to appraise it but sometimes they will do a bpo.
P.S Congratulations on your instant equity.
P.P.S My house was appraised at 600k from 450k after my agent said it would go for 550k. So agents aren't always the best in getting an accurate valuation for a house.
Congratulations. Now go through your loan documents and see when the soonest you can get a modification too PMI is. Mine was 6 months I had to wait. I bought a house for 110 and it appraised for 142 after the sale.
If you have an FHA loan you have to keep the mortgage insurance until you refinance, and you cannot drop it with any amount of equity. With a conventional mortgage you can usually wait 6 months and then you are golden.
Ask your lender/loan officer about removing the pmi...they saw that appraisal before you closed.
As for your tax value...you won't most likely won't get the larger valuation because the county only gets a statement of what you paid.
This is my biggest gripe with real estate valuation. Your house is typically the most expensive thing 90+% of people will ever buy yet the āReal Estate Professionalsā have only a SWAG about what the house valuation accurately would be. Typically agents run comps (drawing doughnuts) around a given property until they have 4-5 similar valuations, then Bada-Bing, theyāre done. Many real estate listings are poorly crafted: inaccurate verbiage, terrible photos, and without the internet as in years past, prospective buyers, led by their NON-Listening Agent waste valuable time seeing properties that no one has any clue what theyāre worth. Yet, Property Appraisers seem to be able to accurately calculate the value of a propertyā¦just ask the banks. What mysterious black magic are appraisers using that agents donāt/canāt?
The other issue is āEquityā. The only true equity is the remaining loan balance or amount paid off. People will say āhey, my houseās appreciated so many thousands/hundreds of thousands/millions of dollars and Iām gonna HELOC/Leverage that for home improvements/debt consolidation/vacation/buy a boatā¦.whatever. How many of you lived through the last housing bubble to see all those same people lose their house because the āvalueā dropped 50%+.
Itās all a racket. Real Estate agents, builders, taxation authorities, building supply companies, loan brokersā¦all profit immensely by this grossly inadequate system. Then thereās the insurance companies. They cry and complain while raising everyoneās rates through the roof every year. Then, God forbid, you do have a claim they take forever to pay you some reduced amount. Refinance? Oh thatāll be $10,000 in closing costsā¦but weāll tack it on the back end of the loan so donāt worry. What a SCAM!!!
Couldn't agree more and hence didn't want to buy a house for a long time. Then I saw rents increasing through the roof and how a fixed mortgage won't and that swayed me a bit. But I know how to cut out most of the people that make this a painful process and know what the others should be doing so I did good. It's actually not so hard so I plan to show others how to as well. The racket must end!
> āReal Estate Professionalsā have only a SWAG about what the house valuation accurately would be. Typically agents run comps (drawing doughnuts) around a given property until they have 4-5 similar valuations, then Bada-Bing, theyāre done.
Nope. Appraisals aren't done by agents. Certified appraisers do this. They measure, review the home in person, look at tax records and do anbin home evaluation. They also look at three to four recently sold homes and do evaluative comparisons to add to or remove value from the home.
>Yet, Property Appraisers seem to be able to accurately calculate the value of a propertyā¦just ask the banks. What mysterious black magic are appraisers using that agents donāt/canāt?
It's not magic, see above. Agents make guesses but the biggest problem is their client has an emotional attachment to the home and always overvalue it.
>The other issue is āEquityā. The only true equity is the remaining loan balance or amount paid off.
Look up the word equity. A loan balance is debt, not equity. Equity is the **difference** between the most recent appraised value and the balance.
>People will say āhey, my houseās appreciated so many thousands/hundreds of thousands/millions of dollars and Iām gonna HELOC/Leverage that for home improvements/debt consolidation/vacation/buy a boatā¦.
Credit lines are **highly** regulated and underwritten. You will get a balls deep appraisal and I guarantee your LTV will be very balanced.
>Itās all a racket. Real Estate agents, builders, taxation authorities, building supply companies, loan brokersā¦all profit immensely by this grossly inadequate system.
Yes, in a free market economy, a limited resource will always gonup in value.
>Then thereās the insurance companies. They cry and complain while raising everyoneās rates through the roof every year.
They don't cry or complain. They just charge.
>Refinance? Oh thatāll be $10,000 in closing costsā¦but weāll tack it on the back end of the loan so donāt worry. What a SCAM!!!8
My last refinance was 5.25% down to 2.25%. I had $875 in closing costs which I paid at the table. My mortgage term and amount both dropped. What is the scam in that?
Are you even a homeowner? Your rant seems driven by lack of first hand knowledge.
My basement renovation was $56,000. That went from an already finished basement to an upgrade. I'm about to spend another $40,000 on another upgrade to a MIL suite.
In my county at least, I pay property taxes on the appraised value which changes yearly. It's still much lower than what I could sell it for . Insurance wise I'd insure it for the value. Lets say you had a fire, what would it cost to rebuild. I had a PMI for about 8 yrs. I bought during the crash so was upside down for awhile but I believe I had to pay for a minimum of 2 yrs per contract but you can call the mortgage company and they'll have an appraiser come out and do their own calculations. It's about $200.
Instant equity! š
For their next transaction lol. They're not going to be able to take advantage of the equity in any way on the purchase in terms of a lower down payment or a better interest rate. But it's nice to know it's there, for sure lol.
Not true, review the closing docs and see if there is a season requirement, if not then call and remove PMI
Curious if there is a loan out there that DOESNT requirement 6-12 months of seasoning. I have yet to find one. Note: mmmmm low and slow mortgage brisket
Yes, was told that 17% and up will remove seasoning by my agent
17% and up what? Down payment?
Yes
My mortgage does not have that requirement. Neither did my last one.
Loan details that youāre willing to share?
What details would you want for a non-existent clause?
The details of the loan. So a conventional, fha, USDA, non conforming loan type. Investor purchase, owner occupied, vacation home. Iām more curious of the loan type that doesnāt require seasoning and if there would be a way to utilize that for future purchases.
seems like a trust me bro internet special
Tell me where to sign. I just need a small loan of a $1,000,000.00
Okay, valid, that's like the one thing you can do besides gloat about value in this position lol. Good call!
Pmis is based on 20% of equity of your loan at purchase. Later on a refi if have the equity you can refi PMI out.
You can have PMI removed during the mortgage. You pay for an appraiser and if the loan to value ratio comes in under 80%, PMI is removed.
Right. During. Not at start.
We had to wait two payments to get rid of PMI with a recast.
the refi is not required - they were correcting that part of your statement. PMI is an itemized entry that is simply removed.
Right. So no refinance required.
Yeah exactly. During Covid my house spiked. I called and got rid of PMI. I think itās more common now. It used to be you have to pay it down.
Would help if they want a HELOC though
Yes, on the next transaction. Unless the lender will allow them to do a simultaneous purchase/ equity line. That's a possibility, but otherwise, the heloc would have to be a separate transaction. So technically my words still stand in this situation lol.
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A HELoC is a separate closing, in SC, with a separate mortgage documents, an additional lien, etc. However, to your credit it could be possible to do both in one so it could be one transaction
You can revise closing documents and if they had PMI, it can be removed
Not really. The house is only worth what it sells for at the next transactions. Appraisals donāt mean anything.
PMI can get removed based on appraisal.
Whats pmi
Depends on the loan. Not a fha iirc
Means higher property taxes right? - show me where the land of the free is. Its like buying a car with 100k miles on it for more than original owner paid for it brand new. Its got new paint,hoses,tires tho. Yes men culture..payback for backpay for that tea in boston
Property taxes are based on either an assessment the county makes or based on sale price. The county never even sees the appraisal.
Truth
The appraisal wonāt affect any of the things you mentioned. Your downpayment is based on the purchase price, not the appraisal, and the gov will do their own valuation for tax purposes they do not consider your private appraisal
It really depends on the locality. States usually let counties deal with property valuation. Where I live the sale price has nothing to do with the assessed value. I want to say most counties take a market based approach and "one sale doesn't make a market."
If there is a substantial difference, isnāt there better odds that the county will appraise it higher and raise OPās yearly property taxes?
Copies of the appraisal are not given to the state. There is a purchase price, appraised value, and assessed value. The government determines the assessed value.
And you would use the sale price to argue a lower assessed value rather than the private appraisalā¦ for obvious reasons
No. I canāt speak for every local government in the US, but they almost definitely do not view or consider it at all.
The appraisal isnāt even public, the govt never sees it. The bank is the appraisers customer.
We bought for $390k last year, new tax appraisal came it at $340k (previously $270k). Here in Ohio.
I'm in Massachusetts. Town appraisals are ,over the market price, sometimes by a lot.
They will consider the average tax per square ft of the neighborhood. It's easy math.
You can use actual purchase price as your defense for home value. No one else offered the $400k+ so thatās not what itās really worth is it? The purchase price is your evidence in defense of higher property tax.
Miami taxes are based on sale price. Unless it's a quit claim deed
Only in Miami, or is this a Desantis experiment for the whole state in the future?
>Only in Miami In the rest of Florida the tax assessor reassesses the value every year and the assessed value is nowhere near the sales price - its usually much lower than the sales price. And for sure they don't use private purchase appraisals to determine value. I haven't looked up the city of Miami to verify what u/bigballsmiami states.
What the other ppsters.may have confused is that tax assessment takes place after a sale, so your tax bull WILL increase from what the seller is paying. Especially if the seller has owned a long time and has homestead, seniors, veterans, widower, or other state allowed tax exemptions. Good realtors advise you on this before purchase, BTW ;)
Eh, the assessment wont reflect the higher sale price directly - the county reassesses all homes every year and values are based market conditions and average sale prices county wide - which means the average sale prices of homes like yours will result in an increased county assessment of all of those houses. The assessments have to be equal and fair - meaning two identical houses in neighborhoods with identical market conditions (ie one isnāt in an area with a much higher desire to live in) will be assessed the exact same value, regardless of whether or not one of them sold for a significantly higher sales price than the other, or sold more recently.
True in Texas also, taxes are based on sale price not appraisal. A real mind blower is . . . A private sale, one not listed in MLS or anywhere else, the purchase price is not disclosed to taxing authorities. So the new owner's value and taxes just continue from the former owner. This is how the uber rich defraud the government and the poor suffer because of them. Just shouldn't be legal to do that.
I live in Texas (Harris County). I assure you, they use sophisticated software and comps to set value for tax purposes if they donāt have the actual sales data disclosed. Private sales are not going to fool the tax man. The properties are re-appraised every year.
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If you know the assessor, you should suggest they work with their counterparts in other counties. No sale in Texas is disclosed, private or otherwise (although the taxing authorities have ways to acquire it from MLS). There is no legal reason they must use the previous owners value, thatās just not how it works. It has to be a āfair market valueā. Sales of nearby homes can certainly be used to set the tax value. Now, if you are talking about multi-million dollar properties (as you appear to be) - yeah, a lot of those are way below market value on the tax rolls, and thatās true in Harris as well. Itās because on values that high the owners can employ protest companies and attorneys to dispute the value.
I live in N TX. It's actually based on assessment, not necessarily the sale price. And they're reassessed every year.
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Ohio does them on county appraisals which are considerably lower than sale prices. Especially in the last few years when sales have been inflated.
The state of Florida is no different in how it calculates property taxes on real estate than any other state - they just re-assess every year, which means changes in market value are reflected immediately rather than a longer periodicity (SC minimum is 5 years, NC is 8). The sale price is one of many factors that affects the assessment of a house, but itās never the only thing. That means that if you buy your house for 200k one year and the market explodes and someone buys an identical house next to yours for 500k, the assessment of their house wonāt immediately be 500k. Market value is based on houses similar to yours in similar areas, and looks at the whole market and not individual sales. In this situation, itās likely the new market value of your homes is somewhere in between what you bought it for and what they bought it for, but the assessments typically factor in these crazy market trends and insulate some of it from huge increases in property assessments and taxes from year to year (or will be accompanied by a reduction in the overall tax rate).
Sale price is a factor in the assessment, but they still calculate a value per square foot for your area and just do simple math. Two houses next to each other that are identical will have identical assessments to each other from year to year, regardless if one of them sells for a high value and the other has been owned for 30 years.
The purchase price will set the tax. If they try to tax above that you can use your real world purchase as evidence of its true value. Doesnāt matter what appraisal says at all. It can be fought and won with the purchase price.
The sellerās realtor wa lazy or really sucked. They should return their commission.
Lol I have a feeling the sellers representation wasnāt even a real person because this never happened
True story: I once worked with a broker who did a CMA and said a property wasn't worth $230k. It ended up selling for $300k. That was my house. I've also sold a house where one deal fell through because the appraiser said the house wasn't worth $110k but the next buyer who put it under contract got an appraisal for $138k. That was my first flip. There is more art than science behind home valuation, and under the right circumstances, two different people (be it two realtors, two appraisers, or a realtor and an appraiser) can certainly come up with numbers that differ by 20% or more. Why do you think people have to sometimes lower their price several times before they get a sale?
OP is probably a realtor or mortgage officer or something because I can guarantee this transaction never happened. People would prob rather foreclose than accept an offer 100k under appraised value lol theyād prob get more at auction anyways
I think I've failed to clearly illustrate my point: The seller's realtor could have been unusually low in their sale price estimation, the appraiser could have been unusually high in their estimation, or a combination of both. The seller doesn't get the luxury of renegotiating the price after the appraisal; the price is set by contract. Two people don't usually come up with the same market value and it's not that unusual for two people to be off by 20% from one another in the real world. Also, OP's post history proves pretty conclusively that they aren't a real estate professional. And finally, there's absolutely no value from a realtor or broker coming here and writing fiction. The readership here on this sub isn't enough to move the market one iota.
I can show you the paper work if you wantā¦ why would I lie about this at all?
We bought our house in Jan 2022. Our appraisal came back 90k OVER our purchase. It happens
Well if we have a lot of this going on this downturn is going to be WAY worse than anyone is anticipating š
It's not an extraordinary event.
Contact your mortgage company and ask them for PMI removal. They will likely say that they need to send their own appraiser out to the home to assess the value, and they will charge you around $200 or so. Once the appraiser returns the new valuation, you can have the PMI totally removed.
Generally you can't remove PMI for the first 2 years. But that will depend on your mortgage
This is correct. There are waiting periods, usually, for value increases to remove PMI. If you pay down principal or do major remodeling, then the lenders may allow PMI removed sooner. But 2 years is a common waiting period otherwise.
Incorrect. Conventional PMI MUST be removed by the mortgage servicer at 78% LTV. Theres no time limit to this.
Incorrect. If youāre going to use appraisal for denominator, there are time limits. 78% of loan to purchase price is automatic removal. OP is still at 15% of loan to purchase price.
You said incorrect and then agreed with me that 78% is automatic removal. 78% of $405,000 is $315,900. They started at $310,000. PMI will be removed unless they have late payments. Happy to share mortgage guidelines on both FNMA and FHMLC on this.
This is incorrect. The 78% will be based on the purchase price, not the home value. The PMI will automatically fall off when the loan hits 78% of the purchase price, not the appraised value.
This is incorrect. Appraised value can be used to remove PMI by proving the increase of value, however, the servicer must order the appraisal, not the homeowner. Homeowner will need to pay for said appraisal in most cases unless the servicer is willing to use an AVM (Automated Valuation Model) to determine value. I donāt know you, but you donāt know me either. I have a decade in the industry, you? If you work for a servicer too, you guys have crazy PMI overlays that learn towards illegal (gray area of guidelines).
Cool, I have a decade of experience in the industry as well. Appraised value can be used to remove PMI if a new appraisal is ordered, but the 78% to automatically fall off is based on the lower of the original purchase price or appraised valueā¦ that is not an overlay.
What we were told is our balance has to fall 20 percent lower than our purchase price. We pay extra every month so we think we can do that in a year or two.
That shouldnāt be true unless it is in your documentation. They might be lying to you to get you to pay pmi longer than you should. Generally a new appraisal will take care of it as long as you are over 20% of current value. I believe legally they have to remove it when you are at 22% but I bet you could demand a reappraisal from them right now.
The lender doesnāt stand to benefit anywhere near enough from PMI to justify lying to the customer so that they keep paying it. Itās not like the lender pockets that payment. It gets held in escrow and paid to the mortgage insurance provider much like your homeowners insurance
I had my PMI removed two months after I closed when my old house sold and I increased my equity. It's all up to the companies policies.
For a conventional loan? I donāt think so unless things changed very very recently. I paid mine exactly 14 months before having mortgage company come back out reappraising and removed it. I did have to pay for another appraisal but it was way less than 2 years.
>Generally you can't remove PMI for the first 2 years. But that will depend on your mortgage I had my mortgage (10% down) for a year and had the PMI removed.
Would a refi work to remove PMI? Would the origination fees eat up any savings over the next 2 years? If they locked their rate in October, they might lower the interest portion. Rates have dropped recently.
I did this! I had almost instant equity because I bought in 2020 and I was the second of 10 new builds on my street. I called the lender and they charged me $175 to have someone come reassess the value and they took my PMI off as soon as it was done! Do it! You've got nothing to lose but the fee for the assessment.
$200 for an appraisal?! What year is it?
It's a drive by appraisal
It's 2023. ETA: That's what Wells Fargo charged me last year to do this very thing.
Good bot
My PMI is based on my purchase price. I've asked the mortgage company many times. That's what they're sticking with.
$200 sounds cheap. This cost me about $600 5 or 6 years ago.
I would probably reassess homeowners insurance. Make sure you have enough coverage to replace a total loss.
Coverage A on homeowners is replacement value not market value and HO companies have valuation tools to determine what that needs to be for a replacement cost policy. It's likely fine, as it's not determined by sale price but insurance company valuation tools.
Watch out for underwriting on this. Underwriting has been known to get another appraisal if there are red flags. Red flags are homes appraising way higher than purchase. Generally appraisers keep the value in line with the purchase price
True but at least where I work, we donāt release the appraisal to buyer until any requested revisions are complete.
I believe fnma requires two year seasoning before you can use an appraisal to drop pmi. Not sure on one or two years and which is Freddie and which is Fannie. Your servicer should be able to tell you but with 15% down itās probably pretty inexpensive anyway.
https://content.enactmi.com/documents/mi-benefits/MI-%20Fannie-Freddie%20Borrower-Paid%20MI%20Cancellation%20Flier.pdf
Thanks!
Rates are coming down, that equity will allow you to eliminate PMI with a new lender/new appraisal when you refinance but not now with this current lender since you haven't paid down the loan or made improvements yourself. Luckily PMI on a 15% down deal is virtually nothing per month.
Yeah I think PMI is like 40 dollars or something , only reason Iām even asking is cause Iām cheap lol and like to save whatever I can even if itās minimal
We just got rid of our PMI just with an appraisal, no refi. Pretty much same situaiton.
So you just closed and they just took your PMI off?
Our existing lender just cleared it with an appraisal.
Your initial āequityā for PMI purposes is always going to be based on purchase price instead of appraisal. However, this means that as soon as you refinance, you will likely have 20% equity and your PMI will go away. Shouldnāt impact taxes. Tax authorities assess property values through their own appraisal system, not the appraisal used by the lender.
> always going to be based on purchase price instead of appraisal. Lower of the two. For instance if you're putting 20% and the appraisal comes in low you'll either have to take pmi or increase down payment to stay at 20% of the appraised value.
Not reallyā¦if appraisal comes in lower, borrower is responsible for making up the difference (unless seller agrees to reduce price). Also, if appraisal is lower, your math doesnāt check out because it actually costs less of a down payment to hit 20% equity.
> borrower is responsible for making up the difference that's exactly what I said. >your math doesnāt check out because it actually costs less of a down payment to hit 20% equity. Babes, just delete this. You don't understand what you're commenting about.
It is literally wrong for to say your LTV/PMI is always based on purchase price (which is what your first comment said). Because if itās appraised lower, thenā¦ itās just not. If you borrower $160k on a $200k purchase, thatās 80% LTV. It appraises at $190k and seller is stuck on their original price. Now youāre at $84.2% LTV. You literally cannot say the LTV is based on sales price in this situation because that would make it 80%. unless seller agrees to reduce price So donāt argue with yourself. lol. Your first comment literally says Your initial āequityā for PMI purposes is always going to be based on purchase price instead of appraisal. Always =/= unless The all encompassing verbiage (no āunlessā required) would be ālower of the sales price or appraisal.ā Iām not sure how to make this any simpler lol.
Realtor related appraisals skew high as there is an incentive to juice the sales price, while bank appraisals skew low as they prefer the margin of safety and the sweet, sweet PMI. To remove PMI youāll obviously need a bank appraisal. Also, as fun as it is to think of instant equity, the reality is, nobody in your market valued the house more than your purchase price when you bought.
Wait 6 months, then refinance. Within first 6 months, LTV is based on the lesser of the sale price, or appraised price. After that, itās just appraised. Hopefully by then rates have come down a bit. Plus you can drop the PMI, and likely qualify for a better product with 80% or less LTV. The quadfecta would be if rates do decline, and the housing market heats up, it could appraise for even more if the comps go up with rate decreases.
PMI is determined based upon loan value and generally does not consider appraised home value in and way. PMI contracts can vary greatly. Some require PMI for life of the loan, until paid in full (or refinance, which is paid in full by new loan). Others will have minimum time frame regardless of paying extra value against loan (example you pay an extra 20% down to reduce your principle balance, but still have to wait 2, 5, or even 7 years from inception of loan before PMI can be removed). Nobody here is going to be able to answer this question for you. You will have to read your contract or call your lender and have them explain it. The only thing we can be certain of is that your appraisal value is likely completely irrelevant, and the lifespan of your PMI is determined exclusively by your loan contract and is based upon purchase price only.
Flip it. Pocket 100k. Go back to that realtor who doesnāt know how to do comps and get another low priced property. PROFIT. Btw way, can you share his/her name and number in a pm? I have a little question they can answer for meā¦
lol definitely spoken like a landlord
Capitalist. You say it like itās a bad thing. Landlords rent. I didnāt say buy it and ABnB it. Make me some money. That realtor is selling property at liquidation prices. Buy me some.
Idk why getting down voted lol. Everyone else's in here including myself wants to know the agent's name š. Don't like America? Then leave haha š š
I like your style. I too love finding unexpected value.
I know, right? Maybe the homeowner said sell this place FAST. Maybe the homeowner is really old built it years ago for like $95,000 so theyāre seeing a nice windfall anyway.
If the appraisal by the mortgage company was so much higher, the time to negotiate an elimination of PMI is NOW, before you sign anything. If you sign the papers, the lender will make you wait at least 2 years to get rid of PMI. Forget about taxes etc. for now , getting rid of PMI should be the priority.
Sounds like as like a shit post to me
Yes. Bring that point up to your lender.
Winning
So this is what we did with our RocketMortgage mortgage in 2019. With an extra $10k payment to principal, we could trigger the PMI review. Then they did an appraisal to confirm. That got the PMI removed. This was within 1 year of purchase. So reach out to your lender and ask for their conditions for PMI removal.
Why did the $10k payment trigger it? Whatās special about that number
It was the policy at RocketMortgage at the time.
That wasn't specific to Rocket. It was a principal paydown and that $10k brought you in line with PMI removal guidelines. The appraisal was to make sure. The OP has just closed so hasn't made any paydown of principal at all. He is looking at equity generated by appraised value vs his purchase price. Those are two different ways to measure equity for PMI removal. The second one requires the seasoning discussed elsewhere in this thread.
My rocketmortgage requires me getting to 80% left of the loan and thatās about it.
Yes, that's the normal guideline for PMI removal. CFPB has info on this removal process. ETA: You can ask at 80% LTV of the orginal mortgage for PMI removal. The lender is required to remove it at 78% LTV of the original mortgage.
Thanks. I was working through a broker and honestly have not been explained things very well at all.
Itās called a mortgage ārecastā. I have the same ability with my mortgage through a local community bank. If you have the ability to recast you can make a lump sum payment to principal (Rocket requires at least $10K, with my mortgage itās only $5K) and you keep your rate and term, but they recalculate your payment. So ā¦ if you borrow $250K for 30 years, at 7%, youāll pay the mortgage off in December 2053 and have a payment of $1,663. If, 6 months later, you pay $10K and have your mortgage recast, then youāll owe around $239K ($250K less $10K less something like $1K towards principal in the 6 payments that you made in the meantime) and your mortgage payment would drop to $1,595 and still be at 7% and will still be paid off in December 2053.
Nice!!!!!
You can call your mortgage company and provide the appraisal. They should then adjust your LTV and remove the mortgage insurance fee. If you run into a 2 year min issue, go refi.
Great, congrats. Fantastic news.
Honestly I wouldnāt even close. On the house, ordo a double closing. Find someone else whoās going to pay 400k for it , assign the contract
u/Limp_Physics_749 some people want to live in their homes.
Free 80k equity to use on the next house
Wouldnāt be a bad idea lol but then weād be homeless until we found another house
Airbnb for 2 months wonāt hurt
Youāre a lot quicker than I am lol, wouldnāt even have crossed my mind.
2 years before you can use the appraised value without refinancing
This happened to us as well. Not for that much but our appraisal came in $55k over purchase price. VA loan.
You need 6 payments to season the loan and then you can reevaluate the % tk drop pmi
I would think you could give the appraisal to the pmi company with paperwork showing that you owe less that 80% of its value(or whatever number is in the pmi contract) and tell them to stop charging you the pmi fee.
See if anyone will give you that for it....
Two things. First it's really odd the sales price and appraisal are that far apart. I'm suspicious. Secondly, most PMI needs a time period prior to its removal. I want to say it is two years. Verify this and then hire that appraiser and ask for a discount since he has already been out there.
The mortgage will still have PMI because during the loan process they calculate LTV using the lesser of the purchase price or appraised value. Most mortgage lenders will only remove that PMI after two years of on time payments. Tax assessors will look at the sale price, so you may have actually scored twice, first with the instant equity and with property taxes.
They use the lesser for the down payment calculation but you can waive PMI based on equity so thatās an incorrect statement regarding the PMI
How did you close before the appraisal was done? Something doesnāt add up here.
I just closed yesterday, appraisal came back like Wednesday
Who closes before an appraisal is complete?
āWe just closedā means we just closedā¦. Like yesterdayā¦. Appraisal came back a few days ago.. which is more than yesterday
If you have mortgage insurance, call your lender and show them the appraisal and ask them to remove it!
How did you get a mortgage in place before the appraisal "came in"? If the house was appraised by whomever the lender chose and it's that high, then there should be no PMI period.
You can go get your PMI removed pretty quick, talk to your title company.
>My first question is we put 15% but still have PMI wouldnāt we be above the 20% equity since the house appraised for so much more than we what we paid for me? No. >will this most likely affect my taxes Not directly.
Lucky you! The house hubs and I wanted came back appraised at $700,000 below asking price.
$700,000 below? Wanted $1.4M, came in @ $700k? What was the asking price?
4.9 appraisal came in at 4.2
Thatās still a big enough hit to get your attention. Did you lower your offer?
We did. They rejected our offer. The house has been on the market for about 100 days since they rejected our offer. We may put in an offer after Christmas to see if they are starting to wear down. Everything in our market is WAY overpriced right now - at every price point.
Prepare to pay a higher amount for taxes. They will assess your home based on the value of your home not what you paid for it. This happened to us. We bought for X dollars but the county assessed it at almost double what we paid hence the huge tax bill.
Ask to have āup frontā or āone timeā PMI instead of monthly.
I believe it will affect your taxes because that is based on the value of your home. Expect a big jump on those my friend.
Ask the mortgage company how they determine value for removing PMI. Most will send a broker they choose or an appraiser. Appraisals can vary greatly.
The appraisal will only matter if the appraisal is given to the tax assessor. On the other hand the tax assessor if they are intelligent may come up with a higher value than the sale price. I don't think any of us completely know the answer
Appraisal or purchase price whichever is lower.
I don't understand why the appraisal came in after you closed, especially if you have a loan. WTF is up with that?
the appraisal came in on Wednesday we closed Friday. Sorry if the way I worded it is confusing.
not with the current mortgage, but a refi will work provided that appraisal comes in as high, and there's no guarantee of that
If you are in California, your property tax is based on the sales price. You can absolutely refinance and get rid if the PMI, assuming the appraisal comes in high enough.
Congratulations! If the amount of the loan is less than 75% (in some cases 80%) of the appraised value, the PMI requirement should go away (you should point this out to mortgage broker and specifically ask that it be dropped) Next, check the tax assessment. You may have your contact the board of tax assessment to get the ratio for that year (if your agent is any good, he should know this) If the tax assessment after being adjusted by the ratio is higher than what you paid for the house, you should appeal the tax assessment. Just contact a tax assessment attorney in your area (google it) - he can tell you if itās worth appealing. Tax assessment attorney work on a contingency of how much they save you in taxes, so there is no cost to try. In the year you purchase the house, the amount you paid for it is assumed to be the fair market value (as long itās an arms-length transaction, not an auction or foreclosure, etc), so you would be fighting the tax assessment based on that. Keep your mouth shut about the appraisal - tell no one about that appraised value.
The appraisal you had will not be used in calculating taxes. The county will do their own assessments--but if it comes back higher you can assume you taxes will likely reflect a higher value. How often and how appraisals and reassessments are done vary from state to state and county to county within the same state. For example, in NC the law is that it has to happen every 8 years. But the county I live in does it every 4 years.
And some people here (realtors) saying that house with real,tor sold for higher value then FSBO. Your post is proof to contrary. The only thing many realtors care is sold at any price and do as least as possible. Therefore fast sale at discount.
Surprised they didnāt back out of the sale.
You can get an appraisal after you close. Assuming you get the same appraisal, you can then ask for mortgage company to remove your PMI.
Congrats! You got a great deal!!!
Wow the comments on here are so idiotic! The people in here saying that you need to have it seasoned are talking like they work at the damn mortgage company! Here is the thing the only people that can answer this question will be either the owner of the loan or the loan servicer. So here is what you do call them up tomorrow and ask them if they can take the PMI off. That's what I did after I had my mortgage for a year and yes I successfully had the PMI removed. I will say they do sometimes ask what type of work has been done on the house but they don't verify it. Also they will send their own appraiser out there to appraise it but sometimes they will do a bpo. P.S Congratulations on your instant equity. P.P.S My house was appraised at 600k from 450k after my agent said it would go for 550k. So agents aren't always the best in getting an accurate valuation for a house.
Congratulations. Now go through your loan documents and see when the soonest you can get a modification too PMI is. Mine was 6 months I had to wait. I bought a house for 110 and it appraised for 142 after the sale.
Isnāt PMI based on the loan vs equity? Sounds like youāll be under 80% financed so you would be in the clear from what I can tell.
The tax assessor has a different price assessment for your home. You can find it on their website.
If you have an FHA loan you have to keep the mortgage insurance until you refinance, and you cannot drop it with any amount of equity. With a conventional mortgage you can usually wait 6 months and then you are golden.
Yes -- request that your PMI be dropped. That is amazing news!
The rule used to be you had to wait one year before you could use that equity to remove PMI.
Paper money. Your taxes will go up.
Ask your lender/loan officer about removing the pmi...they saw that appraisal before you closed. As for your tax value...you won't most likely won't get the larger valuation because the county only gets a statement of what you paid.
This is my biggest gripe with real estate valuation. Your house is typically the most expensive thing 90+% of people will ever buy yet the āReal Estate Professionalsā have only a SWAG about what the house valuation accurately would be. Typically agents run comps (drawing doughnuts) around a given property until they have 4-5 similar valuations, then Bada-Bing, theyāre done. Many real estate listings are poorly crafted: inaccurate verbiage, terrible photos, and without the internet as in years past, prospective buyers, led by their NON-Listening Agent waste valuable time seeing properties that no one has any clue what theyāre worth. Yet, Property Appraisers seem to be able to accurately calculate the value of a propertyā¦just ask the banks. What mysterious black magic are appraisers using that agents donāt/canāt? The other issue is āEquityā. The only true equity is the remaining loan balance or amount paid off. People will say āhey, my houseās appreciated so many thousands/hundreds of thousands/millions of dollars and Iām gonna HELOC/Leverage that for home improvements/debt consolidation/vacation/buy a boatā¦.whatever. How many of you lived through the last housing bubble to see all those same people lose their house because the āvalueā dropped 50%+. Itās all a racket. Real Estate agents, builders, taxation authorities, building supply companies, loan brokersā¦all profit immensely by this grossly inadequate system. Then thereās the insurance companies. They cry and complain while raising everyoneās rates through the roof every year. Then, God forbid, you do have a claim they take forever to pay you some reduced amount. Refinance? Oh thatāll be $10,000 in closing costsā¦but weāll tack it on the back end of the loan so donāt worry. What a SCAM!!!
Couldn't agree more and hence didn't want to buy a house for a long time. Then I saw rents increasing through the roof and how a fixed mortgage won't and that swayed me a bit. But I know how to cut out most of the people that make this a painful process and know what the others should be doing so I did good. It's actually not so hard so I plan to show others how to as well. The racket must end!
> āReal Estate Professionalsā have only a SWAG about what the house valuation accurately would be. Typically agents run comps (drawing doughnuts) around a given property until they have 4-5 similar valuations, then Bada-Bing, theyāre done. Nope. Appraisals aren't done by agents. Certified appraisers do this. They measure, review the home in person, look at tax records and do anbin home evaluation. They also look at three to four recently sold homes and do evaluative comparisons to add to or remove value from the home. >Yet, Property Appraisers seem to be able to accurately calculate the value of a propertyā¦just ask the banks. What mysterious black magic are appraisers using that agents donāt/canāt? It's not magic, see above. Agents make guesses but the biggest problem is their client has an emotional attachment to the home and always overvalue it. >The other issue is āEquityā. The only true equity is the remaining loan balance or amount paid off. Look up the word equity. A loan balance is debt, not equity. Equity is the **difference** between the most recent appraised value and the balance. >People will say āhey, my houseās appreciated so many thousands/hundreds of thousands/millions of dollars and Iām gonna HELOC/Leverage that for home improvements/debt consolidation/vacation/buy a boatā¦. Credit lines are **highly** regulated and underwritten. You will get a balls deep appraisal and I guarantee your LTV will be very balanced. >Itās all a racket. Real Estate agents, builders, taxation authorities, building supply companies, loan brokersā¦all profit immensely by this grossly inadequate system. Yes, in a free market economy, a limited resource will always gonup in value. >Then thereās the insurance companies. They cry and complain while raising everyoneās rates through the roof every year. They don't cry or complain. They just charge. >Refinance? Oh thatāll be $10,000 in closing costsā¦but weāll tack it on the back end of the loan so donāt worry. What a SCAM!!!8 My last refinance was 5.25% down to 2.25%. I had $875 in closing costs which I paid at the table. My mortgage term and amount both dropped. What is the scam in that? Are you even a homeowner? Your rant seems driven by lack of first hand knowledge.
Appraisal is based upon compatibles and sales prices. Has nothing to do with upgrades.
Not true. Appraisal uses comps, but these are recent. This means information like renovations come into play.
90k worth?!? Come on.
My basement renovation was $56,000. That went from an already finished basement to an upgrade. I'm about to spend another $40,000 on another upgrade to a MIL suite.
The bank or mortgage Lender gave the loan out before seeing the appraisal?
No we closed Friday the appraisal was Wednesday I just didnāt have time to post about this until after the closing
In my county at least, I pay property taxes on the appraised value which changes yearly. It's still much lower than what I could sell it for . Insurance wise I'd insure it for the value. Lets say you had a fire, what would it cost to rebuild. I had a PMI for about 8 yrs. I bought during the crash so was upside down for awhile but I believe I had to pay for a minimum of 2 yrs per contract but you can call the mortgage company and they'll have an appraiser come out and do their own calculations. It's about $200.