PMI removal – Home Equity Loan?
Question: Does an outstanding home equity loan with an external loan > company impact the decision of a primary lender to remove PMI from a single > home mortgage?
Answer: You do not understand what is going on. When the a mortgage is less than 80% of the homes Fair Market Value you do not have to have PMI.
Fair Market Value has nothing to do with Equity.
Lets say that you buy a house for $100,000 put down 5%. How do you get out of wasting money on PMI?
You get two loans one for 80% of fair market value and a second for 15% of fair market value. Since neither loan is more than 80% PMI is not required.
PMI is insurance to protect the lender, since it protects them they are in no hurry to remove it.
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Filed under: Home Equity Loan
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