The Balanced Spreadsheet-Financial News, Budget Advice, Debt help, Financial Tips, and other advice

April 30, 2010

PMI Removal

Filed under: Personal Finance, Real Example, Uncategorized — Tags: , , — thebalancedspreadsheet @ 4:10 pm

After significantly paying down our mortgage balance and monitoring recent condo sales in our area, my wife and I finally decide to try to get rid of our Private Mortgage Insurance or PMI. PMI is simply is insurance paid by the borrower that protects the lender from potential loss in case of foreclosure.

Currently PMI is costing us $58.26 a month. To remove PMI you must have a Loan to Value (LTV) ration of 80% which means you must owe less than 80% then what the home is currently valued. Our LTV is currently 65.29% after our April payment; however the value of the house is significantly less than the $118,500 we bought it for in 2006. Our current loan balance is $77,365 so we need an appraisal of $96,700 to be at 80%. It is going to be really close; the good thing is that the appraisal is good for 90 days so we would have a few more months to pay it down if we are short.

The Appraisal costs $150 but it is worth it as we can knock off $58.26 on our mortgage payment each month and apply that to the principal owed. In addition it would be nice to get a good estimate on how much our house is really worth instead of estimating each month. My goal is to have PMI eliminated starting with June’s payment. Hopefully it will all work out.

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2 Comments »

  1. Really proficient post. Theoretically I could write something like this too, but taking the time and effort to make a good article is a lot of effort…but what can I say….I’m a procrastinater. Good read though.

    Comment by j4p3methe — May 1, 2010 @ 8:49 am

  2. […] I got back from vacation on Tuesday and received word on my quest to remove PMI from our mortgage payments.  The results were disappointing as the appraisal came back at […]

    Pingback by PMI Update « The Balanced Spreadsheet-Financial News, Budget Advice, Debt help, Financial Tips, and other advice — May 22, 2010 @ 12:08 pm


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