Pay Down Mortgage to Remove PMI, Than Take Out HELOC?

[William D.]

Good Morning!

I am trying to put together a plan for a down payment on my first investment property. I purchased my primary residence around February this year. I paid $260000 and rolled in $15000 in closing costs ($275000 total loan amount). I put down $35250. I pay $199 in PMI and have a $270 monthly HOA as well. I am paying an extra $200 per month to help pay down the loan earlier. I also did a full renovation, about $30000.

I was thinking of paying down the loan with a lump sum to remove my PMI and then taking out a HELOC to add to the cash I have for a down payment. Is this wise?

I currently have $30000 to work with.

Below is my loan info.

General Information Current Principal Balance $237,525.40 Original Loan Amount $239,750.00 Loan Origination Date 02/20/2018 Term 360 Maturity Date 03/01/2048 Interest Rate 5.125%
Payment Information
Next Payment Amount	$1,658.54
Next Payment Due on	09/01/2018
Last Payment Amount	$1,858.54
Late Charges & Other Fees	$0.00
Date Taxes Paid Last	06/19/2018
Last Insurance Payment	$0.00
Date Insurance Paid Last

Tax and Interest Current Year
Principal Paid	$2,224.60
Interest Paid	$5,102.45
Taxes Paid	$376.51
Insurance Paid	$0.00
MIP/PMI Paid	$998.95

[Tony Hightower]

i did something similar. Had been paying a little more each month to pay down principal. Since you have done some rehab, you may get a higher appraisal rate. Normally, you need to pay down loan to 78% of purchase price to have PMI removed. I paid for an appraisal though my bank and they required the appraisal to Loan balance to be at 75% i am not sure how a reappraisal would work with only having the home since Feb/Mar. My reappraisal was last OCT. and took HELOC out in Feb.