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Check Home Value Increase: Over the last decade many Seattle area homes have appreciated in value, potentially lowering the Loan-to-Value (LTV) ratio and setting the stage to remove PMI, which can save $2,000 to $5,000 annually.
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Understand LTV: Divide your mortgage balance by your home’s current value to calculate the LTV ratio. Home appreciation and principal payments can reduce this ratio.
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Estimate Home Value: Request comps from a real estate agent (like HouseHack Seattle!) or research recent sales in your neighborhood.
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Contact Lender: Inform your loan servicer of the potential drop in LTV ratio and ask for PMI removal steps. You must be current on your mortgage to remove PMI, so make sure you don't have any missed payments!
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Obtain Appraisal/BPO: Get a professional appraisal or a Broker’s Price Opinion to officially determine your home’s value.
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Calculate New LTV Ratio: Use the appraised value to determine if your LTV ratio is now below 80%.
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Ensure PMI Removal: Actively monitor your mortgage statements and confirm with your servicer that PMI is removed.
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Adjust Budget: Reallocate the funds from the removed PMI towards savings or investments.
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Leverage Appreciation: Utilize increased home value to gain financial flexibility and lower monthly payments.
For more information, reach out to the team at HouseHack Seattle - we're happy to help!
