A few years ago my husband and I purchased our first house–the little condominium that we still live in. When we purchased it in March of 2004, it felt like a palace. Now it’s feeling more like a dollhouse, but we still love it.
We purchased this place when real estate values were quite depressed, and interest rates were low, enabling us to purchase when it otherwise may have taken us years.
We purchased our house on a zero-down loan, and then real estate took off. Our little condo doubled its value in two years, so we went into cost-cutting action!
I wrote a letter to our mortgage company and told them since the value of the house has increased, they should adjust the loan to value calculation accordingly.
(I even included a couple of real estate fliers for similar places in the neighborhood showing the increased value).
Two months later I received a letter back saying that after researching comparable properties, they do believe that the property’s loan-to-value ratio can be adjusted giving us the needed “instant equity” to drop our PMI payment of $157 per month.
If you’re still paying PMI, here’s how to try to get the amount eliminated:
1. Write even if you haven’t experienced appreciation but you’ve paid on time every month for two years from the origination of the most recent loan).
2. Write if you have experienced equity appreciation (property values have risen).
3. Write if you have at least 20% equity in your loan.
4. If you’ve made substantial property improvements that might increase the property’s value in an appraisal.
If you are able to have your PMI cancelled, you may also get a refund of PMI from your escrow account. Good luck, and happy saving!