Freed by 50

A few weeks ago I wrote about my PMI problem.  To summarize, I’ve been paying $195/month in PMI.  I think home appraisals are subjective nonsense.  I wanted to remove PMI multiple times but the bank laughed at me.

After posting the article, I manned up and called my bank.  I explained how I’ve completed many big ticket home improvements, including solar and central air, and how home values in my area have gone up quite a bit in the last 3.5 years.  I asked for an appraiser to come out at a $500 cost to me, and once we proved that I had more than 20% equity in my house we could remove PMI.

“Twenty five percent equity, sir” the bank lady smarmily (that’s a word now) said.

“Whachu talkin bout bank lady?!” I said

“You need to have twenty five percent equity in your home to remove PMI because you haven’t lived there for five years yet.  After five years you can remove it with twenty percent equity.  We don’t make that rule, that’s a federal rule.”  Said the bank lady in her most nasally voice.

Shocked, I hung up.  The wind had been taken out of my sails.  I was faced with the option of either paying another 18 months of PMI or taking a blind shot at my house now appraising for 5% higher than I’d expected.

$3500 more vapor I’d have to pay.  Thirty-five-hundred!

And that’s when it dawned on me.  If I was on the hook for $3500 anyway, why not refinance somewhere else!  So I set to calling around for rates.  Within an hour, I’d decided on a bank and started the process.

Four days later an appraiser was at my house.  I didn’t bother to tell him that his line of work was subjective nonsense, instead I offered him a bottle of water and a comfortable chair.  He did his work and left.  Three business days after that, my appraisal was in, and it was higher than expected.  Hell, it was high enough to cover my other bank’s stupid 25% rule!  But I hated them now, and we were moving on.

Two weeks from the day I made my initial call I was sitting at my kitchen table signing the refi paperwork.  Not only was I able to remove PMI, but with my stellar LTV, I got a lower interest rate than expected.  Plus I shaved 6 months off my mortgage and saved $270/month.  The closing costs…$3300.

Bye bye PMI!