Buying A Home
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Our tech team has launched updates to The Nest today. As a result of these updates, members of the Nest Community will need to change their password in order to continue participating in the community. In addition, The Nest community member's avatars will be replaced with generic default avatars. If you wish to revert to your original avatar, you will need to re-upload it via The Nest.
If you have questions about this, please email help@theknot.com.
Thank you.
Note: This only affects The Nest's community members and will not affect members on The Bump or The Knot.
question about PMI
we didn't have a 20% down payment so we'll be paying PMI. My question is that the bank said once the loan is at 80/20, the PMI will stop.
Now just to throw numbers out there, if the home is appraised at $250,000, but we took out a mortgage of $200,000, that's already 20% equity ($50,000 = 20%), which means we should have no PMI correct?
I might be using the wrong real estate language, sorry
Re: question about PMI
Since the housing crash things have changed. What kind of a loan are you looking at? For FHA, I believe you have PMI for a minimum of 5 years unless you refinance during that point. Then at 5 years you still have to have either a 78% or 80% loan to value before you drop PMI.
With our conventional loan, we have a minimum of 12 months PMI. We can pay for an appraisal at the end of 12 months (this summer) and drop the PMI of we appraise high enough.
Even though your appraisal might come back at 250k when you bought around 200k, they don't consider that "equity" for loan purposes until you've lived there for 12 months.
When we bought our last house, we put 10% down. My understanding is that the 20% threshold would be when we paid down the loan another 10%. So if it was about at $100,000 and we put $10k down, we'd stop paying PMI when the loan was at $80k.
The percentage only has to do with the selling price and loan. Also make sure to request that it be dropped once you are low enough. In our case, we had to keep the PMI for 2 years minimum.