Is it a good idea to get my house appraised in order to drop PMI?

I bought the house about 2 years ago with 5% down payment. I now own about 9%. With the housing appreciation over the past couple years, the house value has appreciated to the point that I own over 20%. Is it worth the trouble to get an appraisal or is there anything that could make that idea a bad one?

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Yes! Do it before prices drop. I forgot the term but many lenders don’t require a full appraisal for this (I think mine was only $125 and saved me $200/month).

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It’s called a BPO and it’s less than what you would pay for an actual appraisal. Mine was like $150. I’m still waiting to hear back. My PMI is like $112 every month.

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And make sure the appraiser knows the number you need to be at. Be nice to them and they make me more helpful in getting to your target number.

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Yeah they can. Doesn’t mean they’ll give you some crazy high number but if you need to be at $400k you don’t want them to end up at $395k and they’d likely give you the benefit of the doubt.

Many lenders won’t remove PMI just based on home appreciation. You have to actually pay down the loan balance to an 80% level based on the original home value. Before you spend money on an appraisal make sure your lender will remove PMI based on that.

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You can probably get the BPO process started now and submit everything right at the 2 year mark.

Check your docs for the loan to understand how to get PMI removed. In some cases, it’s just an appraisal. In other cases, you may have to refinance out of the original loan, which wouldn’t be ideal in this current environment. The devil is in the details….

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Would recommend asking your agent to pull comps in your neighborhood first just to sense check.

Hopefully you had a semi decent agent that would be willing to do this for you.

Glad it worked! If it looks like you got enough appreciation then def do the reappraisal saving that PMI is a nice treat.

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