Does Brooklyn Brownstone "Gold Rush" equal more equity, and no more PMI?

Hello–I am a new homeowner (almost 2 years in).  The NYT reported a few weeks ago that demand is up for brownstones, and a good friend looking said you can barely get a shell of a brownstone for under a million.  Considering this, when might be a good time to get an appraisal done on my home to see what it’s current day value is and whether my equity is high enough to stop paying PMI.  Does a rise in home value count towards meeting the threshhold (I think it’s 20% of the mortgage) required to no longer have to pay PMI?

sobrooklyn

in Real Estate - General 12 years and 10 months ago

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Kateruba | 12 years and 10 months ago

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I have a loan with PMI on it and my terms are that I can’t get out of it no matter what before 5 years are up.

vthatcher | 12 years and 10 months ago

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What ind of loan do you have?  You may need to refinance to get out of the PMI depending on the product.      Vanessa Thatcher Senior Loan Officer NMLS# 41404    Atlantic Home Capital 4175 Veterans Memorial Hwy Ste 310 Ronkonkoma, NY 11779   Office: 631-687-3510 x106 Direct Fax: 631-918-5222 Cell: 631-672-4113

sobrooklyn | 12 years and 10 months ago

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Thanks, all!  Extremely helpful!

mortgagepro | 12 years and 10 months ago

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Call your loan servicer and tell them you believe based on current values that you have met the Loan To Value (LTV) threshold to have the MI removed from your loan and you want to know the procedure and exactly what is required by them.  Most conventional loans have a two year minimum MI requirement, while FHA is five years.  This will be reflected in your original loan documents.  If you are conventional and two years has passed they may dictate how the appraisal is ordered; and may need to be through an an Appraisal management Company approved by the lender. Don’t go out and spend money on an appraisal until you confirm exactly what your lloan servicer requires. -Adam

callalily | 12 years and 10 months ago

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Yes, absolutely, a rise in value (such that you have 20 percent equity) will wipe out your need to pay PMI. The mortgage holder orders the appraisal and you pay for it. Depending on where you live in Brooklyn and the attitude and knowledge of the appraiser, you may or may not come out ahead. For example, where I live, actual selling prices between truly comparable houses have not budged since we bought three years ago at the nadir of the market, even though demand is high. Hard to say if an appraiser would know the difference, though — he or she could find comps all over the place, depending on condition (not size).

marriedwithfrenchie | 12 years and 10 months ago

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Sobrooklyn, I’m not the expert here, but two thoughts. First, I do think a rise in your home’s equity counts towards meeting the debt:equity threshold your mortgage provider requires for it to no longer require PMI. But second, perhaps more relevantly, you can go ahead an order an appraisal yourself, but almost certainly your mortgage provider will require an assessment by a company if its choice for purposes of conduction any reassessment of your debt:equity threshold for PMI purposes (who tend to be much more conservative in their assessments these days for liability reasons, and many times they’re not from and not familiar with BK so may pick crazy comps). Not trying to be a downer, and in any event you should reach out to your mortgage provider to inquire what steps they would require and what they would charge you, if anything. Good luck!