First Time Homebuyer (Less than 20%)
My wife and I are beginning the search for our first home. We have saved up enough money to put 20% down on a $500,000 property but with little cash reserves left over for renovations. This got me thinking if I were to buy a $400,000 fixer-upper and only put 10% down that would leave me with a hefty renovation budget of $60k-70k. My question is, upon getting the property re-appraised after strategic renovations to increase the value of the home (Kitchen, Bathrooms, Flooring, etc) would I need to refinance to get the PMI removed or would it simply phase out as I should now have more than 20% equity in the property if everything goes according to plan. I know this is a vague question with some assumptions (specifically about the underwriting requirements of the loan), but I want to confirm that my logic is correct and if anyone has performed a similar strategy.
Any and all feedback is very much appreciated.