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We got a commitment letter from the bank today and one of the terms listed said that "PMI 'may be' required on your loan .... the insurance shall remain in effect until the principal balance of the loan based on the original appraised value is reduced to 78% of market value."
I thought you didn't have to pay PMI with 20 % down.
Here are the details:
purchase price 390k
20% down
loan value 312,000.
Is it possible that the appraisal was low and that means we need PMI, I have never heard of this. I do not know the appraised value of the house but on my commitment letter is said we needed hazard insurance in the amount of $247,380, is this a reflection of the appraised value of just a percentage of appraisal since the land has value as well.
Is your mortgage with Wells Fargo by any chance? I have the same issue, and the mortgage is with WF. They require 78% Loan to value before dropping PMI.
Is your mortgage with Wells Fargo by any chance? I have the same issue, and the mortgage is with WF. They require 78% Loan to value before dropping PMI.
They are just saying it may be required in case the appraisal comes in low, it's just a "Cover Your A**" type statement.
the appraisal was done a few weeks ago ... is this general statement just part of the letter regardless of if they got the appraisal or not. They must have the appraised value if they gave me a hazard insurance required coverage amount, so it would seem they could determine if I truly needed it or not.
Yes, a general statement. If PMI was required then somewhere on there it'd list the required coverage amount, or perhaps even the rate of PMI. To be absolutely sure I recommend you contact the loan officer or loan processor to confirm the appraised value.
As a professional without reviewing all the doc's you have difficult render an opinion in your favor Have your mortgage broker answer your questions which are all very valid. CONGRAT'S on your home purchase
My loan is with Wells Fargo, and they didn't require PMI when I put 20% down. So I don't think that is a blanket Wells Fargo policy. (or if it is, it is a new thing)
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