Just to get this out of the way... that isn't my house. I snagged that picture from Pixabay and sourced it down at the bottom of this post. In reality my house is much less grand than this one, but it is my home and I love it with a few exceptions.
One of those exceptions would be the fact that my wife and I have to pay PMI (Private Mortgage Insurance) on our house because we weren't able to bring a 20% down payment to the table when we bought it. For all I know PMI could have been around much longer, but they really started hammering it home after the housing collapse of 2008.
When you are looking at the grand scheme of things, $50 per month on a 30 year mortgage of about $115,000 is most likely a drop in the bucket. It still just drives me nuts that I have to pay it. Fifty dollars spent on such a trivial thing is $50 that isn't going into my own pocket.
Don't get me wrong, I understand why they "had" to start charging PMI, but it seems like there could be a better way to handle it.
So anyway, I was looking at our mortgage statement the other day and I noticed that thanks to some extra payments over the past several years, we finally hit the 20% mark.
80 percent
You have the right to request that your servicer cancel PMI when you have reached the date when the principal balance of your mortgage is scheduled to fall to 80 percent of the original value of your home. This date should have been given to you in writing on a PMI disclosure form when you received your mortgage
Thinking it would be a fairly easy process to get it removed, I reached out to my mortgage company.
Apparently even though we had hit the 20% paid off mark, we did it earlier than what they had calculated. Therefore instead of just removing the PMI, we had to fill out a form for early termination and we also are required to have the value of our home assessed to make sure it still falls in the correct percentage range.
We ran all of this by our friend who works in the real estate industry and she just sort of laughed. She said "there is no way they are going to send an assessor out for a $125k home." She implied they just don't have the resources since they are slammed with everything else (i.e. the crazy housing market right now). Her thinking was they were just going to pull comps in the area and use those as a baseline.
Well, she was wrong and today at 3:30 we have an assessor scheduled to walk through our house to determine if it is still worth at least the original price.
This is where I have to vent for a little bit. It just seems ridiculous to me that they are wasting the money to dot the "i"s and cross the "t"s on this one. The fact is in our area especially the price of homes are up across the board. I know the purchased value isn't the same as the assessed value, but I honestly think the guy is going to spend more money in gas to get to our house than the PMI is actually worth.
I just feel like they are being petty and trivial at this point. We have a really great record of paying our mortgage on time and in full each month. Making us jump through all of these extra hoops for a measly $50 per month into their pockets is just ridiculous.
I would have respected them a great deal more if they had just said "oh, yep, you paid off 20% of your mortgage, congrats on that, we will remove the PMI starting with your next statement!".
Fingers crossed, things go smoothly today and we end up getting it removed, but it really shouldn't be this difficult should it?
