hey there Tiffany thomas with wealthy tiffany dot com and in today's video i'm
gonna be talking about how to get rid of your PMI private mortgage insurance
without getting an appraisal or waiting for your mortgage to hit that eighty
percent loan to value ratio and it's exactly how i was able to get rid of my
PMI recently and before we dive in if you guys are ready for financial freedom
come freedom below in the comments or give me some other random comment to
help out the YouTube algorithm to get this video out to more people alright
like let's talk about PMI private mortgage insurance and how I was able to
get rid of this and I am so excited to share this information with you guys
because I didn't know about this until just a couple months ago so stoked to
share this and I want to explain what PMI is first and then go over exactly
how I was able to get rid of my PMI so you guys can do it too hopefully with
your property alright so PMI is private mortgage
insurance it's essentially an insurance that the lender is charging you when you
do not have a 20% amount for your down payment so you've purchased the house
and you are taking out a loan a mortgage loan to purchase that house and you put
down less than 20% for your down payment maybe you put down five percent or 15
percent then that mortgage lender is worried that you might foreclose on the
property so they want to have some insurance to kind of help them out in
case that does happen so they're going to charge this monthly amount with your
with your mortgage payment it's just included in there and it should give you
a separate line item saying you know that your principal amount was this that
amount paid your PMI was this amount and the interest that you're paying and then
also escrow for your taxes so those should be the line items on your
mortgage statement and if you did not put 20% down when you purchased your
property and that's exactly what I did so I put down less than 20% on the house
that I'm currently living in and a little bit ago they had sent me my
lender had sent me a letter and they had updated their policy on how they are
getting rid of their PMI this private mortgage insurance and they had listed
different options to get rid of it and I wasn't aware of one of these options so
basically to get rid of your PMI you can just wait for your loan amount to become
80% your mortgage loan amount to become 80% a loan to value ratio so essentially
for example if you bought a home that was a hundred thousand dollars wouldn't
that be nice you bought a home for a hundred thousand dollars and you decided
to put down fifteen thousand dollars and so you only put down fifteen percent so
you still have that five thousand dollars and that you would need to pay
on your mortgage in order to drop that down to an eighty percent loan to value
ratio so it would be that you would only have eighty thousand dollars left to pay
on your mortgage instead of the eighty five thousand so hopefully that makes
sense we're just using really simple numbers so if you took a hundred
thousand minus fifteen thousand then you're going to get eighty five thousand
so once you've paid five thousand more you're going to have eighty thousand
which is going to be eighty percent loan to value ratio on your house and once
you reach that you should be able to take off your PMI this private mortgage
insurance and sometimes some lenders will automatically take that off but
some of them will wait until it reaches seventy-eight percent so you really want
to watch that if you have reached your eighty percent then you need to call
your lender and ask them to take off the PMI so that you're not paying that extra
amount you don't need to be paying that you don't want to be paying that extra
amount and you can spend that money on something else you can invest it okay um
so that's one way you just wait for the loan-to-value ratio until you reach that
eighty percent on your mortgage and then another way is to
get a new appraisal done and once they do a new appraisal if that appraises for
more than what you originally purchased your property for and when they take a
look at the mortgage if that new value it's going to give you 80% then you can
take off your PMI by doing it that way so that could have been an option for me
but I would have had to pay five hundred sixty-five dollars to get that new
appraisal you have to work with in this case for my lender I had to work with
whoever they wanted to use as an appraiser I can choose my own appraiser
and I think most lenders are that way but that would have cost me five hundred
sixty-five dollars and then there's another option that I did not know about
and this is called a BPO a broker's price opinion so they essentially have a
real estate broker come out to the house and do a quick appraisal it's not an
official appraisal and but they do you know they come in they take pictures
really quickly and then they give just kind of a quick estimate on what the
value of the home is currently and this works really well if you have made
improvements to your home for example I had finished my basement and so I had
this huge improvement on my house that I could include in this new price
estimate this BPO but even if you don't have that for the Utah market and I'm
sure that it's also in other real estate markets as well but it has gone up
significantly over the past few years so yeah it's gone up astronomically to be
honest it's kind of crazy but by doing this BPO I knew that even if I hadn't
finished my basement that the price would come back way higher than I needed
to need it to be and because of how much the market value has gone up on homes
over the past few years I had purchased my home about three and a half years ago
and since then the prices have gone way up and so I knew that I wouldn't need to
have made major improvements to my home in order for this to work and a BPO only
cost me a hundred and five dollars so a lot less expensive than getting an
official appraisal done so that's what I decided to do I decided to go with this
BPO this brokers price opinion and all I had to do was melon my check for a
hundred and five dollars with a little form that they had sent me in the mail I
had to call them and and specifically request to do a BPO and they meld me
this little form to fill out and it's just you know your basic information
very simple to fill out and I just smelled a check to my lender to my
mortgage lender and once they had received that and processed whatever
they need to process then they had contacted a broker to send out to my
house so that broker called me so from the time that I had meld in my BPO
request two weeks later he had contacted me and wanted to schedule a time to come
out and do the BPO and luckily that was only two days later so he came out two
days later and it was very quick and very easy he was here maybe three
minutes tops he just yeah I opened the door and he
said I'm so-and-so with this company and I'm just gonna take a few pictures and
I'll be out of your hair in a few minutes and if you've made any large
improvements to the home please send me a text message with the estimated amount
and what the improvement was and he basically just quickly walked around my
house and snapped photos in each room and then came back down the stairs
inside okay I'm gonna be outside taking a couple photos and that's it thanks
it's like oh that was super fast are you going to email me your report and he
said I'll email that to your lender sometimes they send you a report and
sometimes they don't and so it really depends on your lender and then he left
so super easy and then nine days later I received an email from my lender with a
copy of that BPO report which showed all the pictures that he
took and he did a few other home estimates that with homes that are
comparable to my home and so all of that was in the report and it put in there
the value of my home currently that he thinks it is it is currently valued at
so all of that was in there and the value was way higher than I had
purchased my home for which is totally awesome
I love real estate side notes okay so once I received that I called my lender
and said okay when does my PMI going to come off they're like well there's some
processes that we have to go through and once we do it you'll see it reflected in
your account so I was like okay I'll wait for you and then 14 days later my
PMI came off of my mortgage payment so pretty quick process under 40 days from
beginning to end and it was very simple only cost me 105 dollars and just a
small amount of time just making you know a couple phone calls and filling
out my check and the little form Melling it in so super easy process so if the
value has gone up significantly for properties in where your property is I
would definitely recommend getting a BPO if you have PMI on your mortgage because
it's totally a win-win the amount isn't that much and my PMI isn't that high so
it'll be it'll pay for itself within two months which is awesome and if your PMI
is a lot higher then that is really going to save you a ton of money by by
just paying that 105 dollars or whatever cost it might be for you with your
lender I'm sure the cost will vary depending on the lenders but it's
definitely more expensive to do that appraisal and a lot less expensive to do
that BPO so really consider that if you guys are paying PMI right now you can
get that taken off and start using that money for something else you know saving
up to there's another property or investing in
the stock market or whatever you want to do with it but I just had to share this
information with you because I was so excited to get rid of my PMI by not
using the normal or the most commonly used methods to get rid of PMI if you
guys found this video helpful please please please hit the like button and
share it with someone else who would like to hear this information who
wouldn't want to get rid of their PMI their private mortgage insurance and if
you guys haven't yet please have the subscribe button to subscribe to my
youtube channel that would really help me out and get this channel out to more
people so more people can see the videos that I'm creating and if you guys have
other ideas about content you would like me to create for you
please put that in the comments below I love creating content for you guys for
what you want to actually see and I will see you guys in the next video thanks