Fannie Mae conventional: Initial appraisal higher tha purchase amount. (home owners insurance, mortgage)

[AlizaBlu]

Fannie Mae, conventional, fixed , Home Ready loan, initial appraisal 85k, purchase price 74,500, loan amt 72265, dp 2235 (3%) 3% interest rate. Is my LTV lowered due to the higher appraisal? What is my initial equity with the higher appraisal? Do I have 17% "paper" equity instantly? Am I needing only to pay 5% (and of course, min 2 years seasoned mortgage loan + good payment history) to remove PMI? Thank you.

[thebigW]

Your down payment was based on your purchase price and your loan terms, not the appraisal.

You may be able to remove PMI in 2 years. You would need to check with your lender to see their requirements.

You would typically have to get a new appraisal to show the difference between your, then current, loan value vs market value is more than 20%, at that time.

[AlizaBlu]

Thank you for your response. I'm aware of that I'm asking about the initial equity because of the higher appraisal I guess I worded my question improperly. I am trying to figure my equity as close because of the higher initial appraisal amount. I'm aware that it's not like cash equity but I do know that it because of the higher priced appraisal it helps with my shortfall of 20% down and it gives me I think approximately 17% equity initially. I'm hoping someone can verify that.

[tlw]

Keep in mind you also have to pay home owners insurance and property taxes every month in your payment which are escrowed. Interest on a mortgage is also front loaded on your loan, so a huge amount on your monthly payment shows as interest. it's really sucks how small amount of money you pay every month actually goes toward principal for quite a few years.