Length of time for PMI

[Shawn Heselton]

Hi Everyone:

I am in the process of selling my home and upgrading to a bigger and newer home...basically I am trying to take advantage of the market above us with the large amount of equity we have in the present home. Fortunately, we haven't had to pay PMI in the past but the possibility of paying PMI for the new house depends on how much we get our current home and what we can get the new house for. For that reason, we are looking at short sale/foreclosures.

If we are able to put down 15% on a short sale and we purchased the short sale for way under the appraised value, can we get rid of PMI with another appraisal a month or so after the purchase as long as the appraisal showed we were out of the 20% LTV threshold? One lender told me no because of Fannie Mae/Freddie Mac rules (which I question because I read a website that FM/FM don't own all PMI policies). But, another lender told me they deal with two PMI companies that don't have a length of time to get rid of PMI. Most lenders are telling me the former, but what I am reading on many websites is that PMI rules are really up to the lender.

What is the truth behind PMI??? I am pretty sure that the stipulations reside with the lender, but I thought I would check out here to see what you all thought and knew. Thanks!!!