Do I still need PMI if my house appraised higher than the purchase price?

Joe Shamie.... I think you answered too fast. This is a purchase and not a refinance. On a purchase your loan parameters (including PMI) is based on the appraised value or the purchase price...... whichever one is lower so the answer is YES! you will still need PMI.You could look at refinancing 6-12 months down the road and dropping the PMI but you will have fees to do that. You could also wait 24 months and after making payments on time you could petitition the lender to remove the PMI and that will probably need an appraisal which is a lot cheaper than a full on refinance. I am in CA and can't lend in Texas but I know a great lender there and I am happy to give you free advice (866) 385-1650

On purchase transactions, PMI is required if the LOAN TO VALUE, is over 80%... However the VALUE is based on the LOWER of the sale price or the appraised value... if it appraises higher, they would go by the sale price to determine your LTV... I'm a Broker here in Scottsdale AZ and I only lend in Arizona. If you or someone you know is looking for financing options, feel free to contact me or pass along my information. 480-287-5714 WilliamAcres.com

If you have a convnetional loan and your appraised value makes your LTV, based on your current outstanding loan balance, less than 75%, you can have the PMI removed. However, your current lender will probably want to use their own apprasier and make you pay for the second appraisal. Good luck.

As Hans said, the value for a purchase is the LOWER of the appraised value or the purchase price, so yes it is still required. Remember that the minute you close the value of your home isn't the appraisal it is the purchase price - unless there are additional comparable sales after you purchase that confirm the higher value. Your house price becomes a comparable for other sales in the area and could contribute to lower sales prices unless there is a lot of demand pushing values up.

Of Course. Absolutely. The rule of thumb the banks use is the purchase price or the appraised value - WHICHEVER is LOWER. You dont get credit for instant equity in this market. Sorry Frank. Have a great weekend. Andrew

Lower of the two, appraised value and purchase price.

The purchase price is what lender use for determining down payment and PMI at the time of purchase. Assuming the appraisal is higher, it doesn't matter. When refinancing, PMI is based off the appraisal.

When purchasing a home the lender will go off of the purchase price not the appraised value. If you had or have PMI when purchasing or purchased , you typically will need to pay it for at least 1 year if it is a conventional loan and 5 years if it is an FHA loan, soon to be life of loan for FHA. If after the first year on a conventional loan you believe your homes value is 80% loan to value or less you will need to prove it to your lender with an appraisal most likely before they will drop the PMI. Read your closing paperwork in regards to the procedure your lender requires to do this. Also call and verify with them what they require at least 3 months before the year is up to be sure you follow their guidelines. As for FHA, after the 5th year if you prove your home is 78% loan to value or less they will drop the PMI, again verify way in advance what their required process is.Call us or email us at 201-962-3555 or Team@BestMortgageOption.com for ano cost no obligation analysis of your situation.Ask for Michelle or Benny We will find the Best Mortgage Option to suit your needs!You can check us out at www.BestMortgageOption.com

Joe is correct but another question is how long have you had your current loan with PMI? There's usually a minimum number of months you need to pay PMI regardless if the Loan To Value is below 80%. This could vary from 12 to 36 months depending on the PMI company. Your current lender should be able to tell you.