Legal Question in Real Estate Law in Florida
Dropping of PMI
The value of my home has increased enough for removal of my PMI. However, my mortgage company says they will not do this without my refinancing my current mortgage (at a higher interest rate). Can they legally require that I refinance to accomplish dropping PMI?
2 Answers from Attorneys
Re: Dropping of PMI
Are you certain that the lender is insisting on refinancing before dropping PMI? If so, assuming that you have sufficient equity in the home, they are probably acting illegally.
There may be a dispute as to whether you have reached the level of equity (20%) required before dropping PMI. In such cases, it is permissible for the lender to insist on a new appraisal.
Good Luck, Elliot Jay Goldstein (Attorney with offices in Tampa and St. Petersburg)
The above information is provided as a courtesy, without any consideration and without knowledge of the specific facts. Do not rely on this information. Seek a formal consultation with an attorney.
Re: Dropping of PMI
The lender cannot require that you refinance in order to drop the PMI. You need to have a new appraisal performed by an appraiser that's on the lender's approval list. If the appraisal shows that you have at least 20% equity interest in your property, PMI should be dropped regardless of any refinancing. Seek the advice of counsel and good luck.
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