Colli Real Estate

Is it normal to have to pay for an inspection when cancelling PMI?

I have paid my mortgage down enough where I no longer need to carry PMI. I sent Chase a notification of this, and they sent a letter back stating that I would have to pay $150 for an inspection to make sure my “property has not declined in value”. I thought PMI was to ensure that I wouldn’t default on my loan…what does that have to do with my home declining in value? I’ve NEVER missed or been late on a payment in 5 years. What should I do?

I have had to pay it in the past.

They are having the home inspected to make sure of its value. If the value has declined you may have to still pay PMI.

PMI covers the bank. The bank will want your home loan amount probably at no more than 80% of your homes actual value. If your home was valued at 100K and your loan in 80K you would be fine but if the value has dropped lower than a 100K and your balance is 80k you will still need to carry that insurance.

ADD: Terry, Noneya is right. When you buy the home they use the sale price to determine value BUT when you re fi or try to cancel PMI they will use an appraisal. As far as a time frame the bank will determine that 12 months is a long time in this market for most places, it may be fine with some banks, may not be with others.

***Controversial***Crash Survival Tip: STOP making your house payment…

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