PMI Removal - A small win for me!

[Grady L.]

Wanted to share this small win with everyone…

A year ago I wrote a request to have my PMI dropped from my mortgage, as my LTV was just over 20% equity from my original appraisal. About a month later I received a letter saying that I didn't qualify yet, but the letter didn't state specifically why. It just had the general guidelines. I forgot about it until this year and so I decided to send in another request. This time I didn't get a letter within 30 days so I started calling the bank. Finally, I received a phone call from the PMI department. That's when I was informed that I wasn't eligible to have PMI removed because the LTV wasn't at 30% equity yet.

I questioned him on the 30% because I believed it should only be 20%. He tried to tell me that the underwriters sometimes deviate from the general guidelines, but I didn't sound like he knew exactly what he was talking about. I wasn’t very happy about this because I wasn’t informed of any changes before closing. So I asked to speak with a manager.

I never received a call from the manager, but I did receive several emails. As it turns out they were tracking my single family home as an investment/multi-family, which would require 30%. I explained that they were tracking it incorrectly and after several more emails they agreed. This morning I received the following email.

“Dear Mr. Layman,

We will be backdating your PMI removal to your original request, 3/7/16. You will be refunded for the overpaid PMI premiums due to the delay in the processing of your PMI removal."

Now, this isn't a huge win as my PMI was only $31/per month but hopefully it is a good reminder for someone else. Make sure you are paying attention to when you can request your PMI to be dismissed. You can check your amortization schedule against your original appraisal and figure out a date, and set yourself a reminder. If your market has appreciated enough then it might be worth it to order a new appraisal. It will cost you a little more upfront but might save you from paying several more years of PMI. Also, some banks will give you an option at closing to buy out of your PMI. You just need to ask about it and see if the numbers work out in your favor.

Best of Luck!