[quote=LAAFTERHOURS]3% is roughly 25K and 130 a month. Appraisal is what 300-400? I can live with the PMI for a while – just was analyzing all the sales around us and thought I should get some input so Im prepared for whenever it comes time to appraise.
My motto is Be Prepared (eagle scout)[/quote]
To put the cost of PMI in perspective, the marginal cost of the extra $25k borrowed is about an annualized 6% (on top of your mortgage rate). So, it’s definitely worth getting rid of.
An appraisal is about 3 months worth of payments, so attempting it once is not a major penalty. I would simply wait until a property close to you sells for what you need to claim.
Another alternative (I’m sure you considered this already, but maybe others can learn from this example) is to pay the 25K from some other source and remove PMI (if the loan allows this method). For example, since you are paying 6% + ~5% (loan rate) on the 25K that pushed you into PMI, a 401k loan or other similar loan might be worthwhile to cover the gap.
In your situation, I would wait at least 6 months into the loan, so that an appraiser can justify a change in price. Any appraisal doen within a month or two is going to have to address the issue that your purchase is the most recent and best comp.
By June or so, perhaps you’ll get a bump in prioces due to seasonal factors, especially if there is not much inventory in your neighborhood.
