You're right to be skeptical about those online estimators—they can be pretty hit or miss. I've seen them overshoot by tens of thousands sometimes, especially in hot markets. Usually, lenders will want a formal appraisal if you're trying to remove PMI early based on increased home value. Definitely worth calling your lender directly to clarify their process and requirements. Could save you some hassle down the road...and maybe even some cash.
Those online estimators definitely have their quirks, but honestly, formal appraisals aren't always the golden ticket either. Ever had an appraisal come back way lower than expected? Happened to me once—felt like the appraiser was having a bad day or something. I mean, how can two similar houses on the same street have wildly different values within a month of each other?
Also, lenders can be pretty rigid about PMI removal even after an appraisal. Sure, calling them is smart advice, but don't be surprised if they throw some curveballs your way. I've seen lenders insist on specific timelines or equity percentages beyond the standard 20% before they'll even consider dropping PMI early. Sometimes it feels like they're just making up rules as they go along...
Have you thought about refinancing instead? If your home's value has genuinely jumped up significantly, refinancing could potentially get you a better rate and ditch PMI at the same time. Of course, you'd need to crunch numbers carefully—closing costs and all—but it's worth considering if you're stuck in lender limbo.
And speaking of hot markets...anyone else notice how quickly appraisers seem to adjust upward when prices rise, yet drag their feet when things cool down? Funny how that works.
Refinancing can definitely be a smart move if your home's value shot up, but you're right—those closing costs can sting. I've seen lenders drag their feet plenty on PMI removal, even with solid appraisals. Sometimes feels like they're just hoping you'll give up...
You're spot on about lenders dragging their feet—seen it happen plenty of times. A few quick points that might help:
- Legally, lenders have to automatically terminate PMI once your loan balance hits 78% of the original home value (based on your initial appraisal/purchase price). But yeah, that doesn't help if your home's value jumped significantly since then.
- If you're trying to ditch PMI early based on increased home value, lenders usually require a new appraisal. Even then, they often have their own internal guidelines—like requiring you to have the loan for at least two years before they'll even consider removing PMI based on appreciation alone.
- Refinancing can speed things up, but like you mentioned, closing costs can be a pain. Crunch the numbers carefully—sometimes the savings from dropping PMI and getting a lower rate outweigh the upfront costs pretty quickly.
- One trick I've seen work: if your lender is stalling after you've provided a solid appraisal, politely but firmly mention you're considering filing a complaint with the CFPB (Consumer Financial Protection Bureau). It's surprising how quickly paperwork moves after that...
Just my two cents from dealing with this stuff regularly. Hope it helps!
Yeah, lenders definitely aren't in a hurry to drop PMI. When I asked mine about it, they acted like I was speaking another language...until I mentioned refinancing elsewhere. Funny how quickly their attitude changed after that.
