Question:
> I called our mortagae company today (Wells Fargo) inquiring about how > to terminate PMI assuming that we could have our home assessed and > hope the value came in around 210,000 and then pay 6k or so towards > the loan to get to the magical 80%. I was told that they would only > consider the curent value of the home if we had made "strutural > improvement" and otherwise the 80% will be based off of the value of > the home when we purchased it in ‘99. > Can this be right?? From some of the other posts it seems that you’ve > been able to base the 80% on the current value. Has anyone else dealt > with this particular issue?
If Wells Fargo owns the loan (as vs. servicing it for Fannie Mae or Freddie Mac), they set the policy. Fannie Mae and Freddie Mac have their own policies that do include being able to cancel the PMI once an assessed value exceeds a magic number that depends on how many years you’ve had the loan. The federal law only requires that the PMI be droppable when the loan value gets down to 80% of the original assessed value. — GnuPG public key at http://badtux.org/eric/eric.gpg
Response:
These increases in house prices seem awfully high to me. Haven’t prices for existing homes generally been about 1 or 2 points above the rate of inflation (that would make it about 4-5% increase per year).
– Hide quoted text — Show quoted text -> Same thing happened to me. We ended up getting rid of the PMI after 1 year, > due to appreciation of the house, but we did have to pay a few hundred to > the bank’s appraiser. Of course, not paying PMI paid back that appraisal > fee in less than a year. > No big deal. This is one of those ‘good’ problems to have. You house has > gone up in value significantly in 3 years. > > Hi. I’m in Massachusetts. We bought in Jan of 99 and have a good > > record > > of payment. Our outstanding balance is $142,900. and the value of our > > property as > > stated on our 2002 property tax is $222,900. This puts us well above > > the 20% > > valuation, but our mortage company insists we need an appraisel before > > we can get rid of the PMI and that we must use their appraisers to the > > tune of over 300 bucks. Can’t the valuation declared on our property > > taxes be enough proof of the value of the property? Any insight > > appreciated. Thanks in advance. > > -drew > We purchased our home in May of ‘99 for 196,900 and put 10% down > leaving us with a starting loan balance of 177,210. The current > outstanding balance is approx 174,000 and the property value has risen > to approx 210,000 (based on property tax valuation and price of other > homes in our area which are all practicially identical since they are > townhomes). > I called our mortagae company today (Wells Fargo) inquiring about how > to terminate PMI assuming that we could have our home assessed and > hope the value came in around 210,000 and then pay 6k or so towards > the loan to get to the magical 80%. I was told that they would only > consider the curent value of the home if we had made "strutural > improvement" and otherwise the 80% will be based off of the value of > the home when we purchased it in ‘99. > Can this be right?? From some of the other posts it seems that you’ve > been able to base the 80% on the current value. Has anyone else dealt > with this particular issue? > Thanks
Response:
I’m going through the same thing with Wells Fargo. The key is to tell them that you did in fact make "structural improvements". We remodeled a babys room and I guess this qualified. We still have to pay a Wells Fargo appraiser $350. I’m actually holding off a few months until a few other improvements are made. I don’t want to pay the $350 and then find out I’m still a couple of thousand under the 20% threshold. – Hide quoted text — Show quoted text -> We purchased our home in May of ‘99 for 196,900 and put 10% down > leaving us with a starting loan balance of 177,210. The current > outstanding balance is approx 174,000 and the property value has risen > to approx 210,000 (based on property tax valuation and price of other > homes in our area which are all practicially identical since they are > townhomes). > I called our mortagae company today (Wells Fargo) inquiring about how > to terminate PMI assuming that we could have our home assessed and > hope the value came in around 210,000 and then pay 6k or so towards > the loan to get to the magical 80%. I was told that they would only > consider the curent value of the home if we had made "strutural > improvement" and otherwise the 80% will be based off of the value of > the home when we purchased it in ‘99. > Can this be right?? From some of the other posts it seems that you’ve > been able to base the 80% on the current value. Has anyone else dealt > with this particular issue? > Thanks
Response:
> These increases in house prices seem awfully high to me. Haven’t prices for > existing homes generally been about 1 or 2 points above the rate of > inflation (that would make it about 4-5% increase per year).
… Actually, historically the price increase in homes is almost dead even with inflation. This is over a long time period though and there are always fluctuations from year to year. I can’t imagine that the market can sustain 20% and 30% increases in prices for many years. At some point reality has to hit the market and the prices or the value of money will have to fall. Anthony
Response:
>> These increases in house prices seem awfully high to me. Haven’t prices for > existing homes generally been about 1 or 2 points above the rate of > inflation (that would make it about 4-5% increase per year). > … > Actually, historically the price increase in homes is almost dead even > with inflation. This is over a long time period though and there are
Note that the average is over a whole state or the whole country. But you don’t live in a whole state or whole country. You live in a neighborhood. There’s three basic types of neighborhoods: 1. A declining neighborhood, where property values are dropping as the housing stock becomes shabbier and shabbier. Often as much as 80% of the residents are renters, the majority of residents are low income, absentee landlords do nothing to keep up the housing stock, you do the math. 2. A stable neighborhood, where there aren’t a lot of people moving in and out and no real reason to move there, where housing values pretty much stay steady at the rate of inflation, 3. A "hot" neighborhood, much desired for good schools, location, or other reasons, where property values often rise faster than the rate of inflation because a lot of people want to live there. Now, all in all, it all averages out at about the rate of inflation. But if you’re living in a "hot" neighborhood, you can indeed see 10%+ gains above the rate of inflation — and if the reason the neighborhood is "hot" is not going to go away in the future (e.g., if the school district doesn’t decline, or the mountain doesn’t go away), the property values may indeed continue to rise for quite some time. — GnuPG public key at http://badtux.org/eric/eric.gpg
Response:
Hi. I’m in Massachusetts. We bought in Jan of 99 and have a good record of payment. Our outstanding balance is $142,900. and the value of our property as stated on our 2002 property tax is $222,900. This puts us well above the 20% valuation, but our mortage company insists we need an appraisel before we can get rid of the PMI and that we must use their appraisers to the tune of over 300 bucks. Can’t the valuation declared on our property taxes be enough proof of the value of the property? Any insight appreciated. Thanks in advance. -drew
Response:
>… Can’t the valuation declared on our property >taxes be enough proof of the value of the property?
NO.
Response:
- Hide quoted text — Show quoted text – > Same thing happened to me. We ended up getting rid of the PMI after 1 year, > due to appreciation of the house, but we did have to pay a few hundred to > the bank’s appraiser. Of course, not paying PMI paid back that appraisal > fee in less than a year. > No big deal. This is one of those ‘good’ problems to have. You house has > gone up in value significantly in 3 years. > Hi. I’m in Massachusetts. We bought in Jan of 99 and have a good > record > of payment. Our outstanding balance is $142,900. and the value of our > property as > stated on our 2002 property tax is $222,900. This puts us well above > the 20% > valuation, but our mortage company insists we need an appraisel before > we can get rid of the PMI and that we must use their appraisers to the > tune of over 300 bucks. Can’t the valuation declared on our property > taxes be enough proof of the value of the property? Any insight > appreciated. Thanks in advance. > -drew
We purchased our home in May of ‘99 for 196,900 and put 10% down leaving us with a starting loan balance of 177,210. The current outstanding balance is approx 174,000 and the property value has risen to approx 210,000 (based on property tax valuation and price of other homes in our area which are all practicially identical since they are townhomes). I called our mortagae company today (Wells Fargo) inquiring about how to terminate PMI assuming that we could have our home assessed and hope the value came in around 210,000 and then pay 6k or so towards the loan to get to the magical 80%. I was told that they would only consider the curent value of the home if we had made "strutural improvement" and otherwise the 80% will be based off of the value of the home when we purchased it in ‘99. Can this be right?? From some of the other posts it seems that you’ve been able to base the 80% on the current value. Has anyone else dealt with this particular issue? Thanks
Response:
>nd the value of our >property as >stated on our 2002 property tax is $222,900. This puts us well above
The value of your property indicated on your tax bill is the ‘assessment’ performed by the Tax Assessor’s office. It is often done by ‘college students’ as a ‘drive by’ – if at all. Most times its based on statistical information. An appraisal, on the other hand, is performed by a licensed appraiser (in most states) who will come into the house and do a room to room inspection, check the basement/roof etc., At least that is how its done here in Western New York.
Response:
Same thing happened to me. We ended up getting rid of the PMI after 1 year, due to appreciation of the house, but we did have to pay a few hundred to the bank’s appraiser. Of course, not paying PMI paid back that appraisal fee in less than a year. No big deal. This is one of those ‘good’ problems to have. You house has gone up in value significantly in 3 years.
– Hide quoted text — Show quoted text -> Hi. I’m in Massachusetts. We bought in Jan of 99 and have a good > record > of payment. Our outstanding balance is $142,900. and the value of our > property as > stated on our 2002 property tax is $222,900. This puts us well above > the 20% > valuation, but our mortage company insists we need an appraisel before > we can get rid of the PMI and that we must use their appraisers to the > tune of over 300 bucks. Can’t the valuation declared on our property > taxes be enough proof of the value of the property? Any insight > appreciated. Thanks in advance. > -drew
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