I have a rental house that I’ve owned now for about 4 years. I recently had an appraisal done and found that what I owe versus what it’s worth is now below the 80% target that the banks use for requiring PMI Insurance. I called the bank to have it removed, and was told that, for a rental house, the value to amount owed must be below 70% (rather than the traditional 80%).
Any know if there’s any truth to this. This was not how it was explained to me when I purchased the property. Any replies are greatly appreciated.
I think that is on a bank by bank basis. the local bank i deal with will go 90% w/o PMI.
I think you have to look at what you signed in order to get rid of it. There’s some process you have to go through to get rid of it and it should be in those papers you signed or you should get it from the bank. Different banks have different rules, but most banks don’t require it if the LTV is over 80. For an investment property some won’t go over 70-75% LTV so maybe they’re getting confused. I think it sounds like you bought the property as owner occupied so it probably gets removed at 80% LTV, but when you told them it’s a rental property, perhaps a different set of rules kicked in when you asked, but it may not really pertain to your particular loan.