Refinance Investment Properties to Remove PMI
by Jim Wades
Are you forking out extra money each month for Private Mortgage Insurance PMI? When you refinance investment properties, you may be able to remove these pesky PMI charges if the conditions are right.
What do I mean by the right conditions? For example your property value may have skyrocketed since you bought it.
To see how this affects your PMI payments, let's take at a look than the formula for your Loan to Value LTV ratio:
Loan to Value (LTV) = Mortgage Loan / Appraised Value of Property
As you can see when the appraised value of your investment properties increases, the loan to value ratio will drop. Once the LTV dips below 80%, you can request your lender to drop the PMI charges when you are refinancing investment properties.
To confirm this, you may have to pay for property appraisal fees and PMI cancellation charges.
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