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