Hello everyone and Welcome to another
episode of Selling Greenville your
favorite real estate podcast here in
lovely Greenville South Carolina I am
your host as always Stan McCune realtor
here in the Greenville area of South
Carolina and if you have any real estate
needs here in the Greenville area please
reach out to me all of my contact
information is in the show notes you can
text me you can call me you can email me
all of that is in there for your
pleasure to reach out to me at any time
I'm basically 24/7 I just got back from
the Dominican Republic I was in punana
for a week I was working I had multiple
closings I had all of my clients set up
if they needed anything that they had
people that they could go tofor
showings and the likeI do not take a
day off during the year this is just
kind of the nature of the job love what
I doand part of that part of what I
have to do is basically be 24/7 on call
for you guys don't feel bad reach out to
me that's why that contact information
is in the show notesas well the only
thing I ask of you guys to support the
show is to do three things at least one
of the three and hopefully all three of
them hit the little subscribe button in
your podcast app actually I've heard
there's a trick if you unsubscribe and
then re be subscribe that that's helpful
I don't know but try it if you have a
second hit the little fstar rating and
leave a little short review to let
people know that you like the show
that's all I ask that helps to get the
show out to as many people as possible
so as I said I just got back from punak
had a lovely time thereincredible
beaches great people great food great
drinksa big fan of the Dominican
Republic been there now a few different
timesbut right before I went there I
decided you know what I need to explore
something with regard to my private home
my private residence and that was
specifically that I've been paying a PMI
fee e every year really every month but
technically it's an annual fee but you
you pay it out every monthand I've
been paying PMI ever since I first
purchased this home now what is PMI
and sometimes it's called MIP
depending on the type of loan that you
have the really short version of it is
if you put less than 20% down on a house
and by the way there are some loans that
don't have PMI even if even if you put
less than 20% but I'm kind of
simplifying things here generally
speaking if you put less than 20% of a
down payment on a house that you're
purchasing your loan ends up being a
little bit more expensive because they
have a hedge in there to protect
themselves called PMI private mortgage
insurance it basically protects the
lender if you default on your loan
to essentially allow them to be able to
get their money back not going to get
into all the weeds on how PMI works on
the insurance and lending side of things
that's not the purpose of thisof
this episode and honestly I'm not super
knowledgeable about all that I'd have to
have a lender get on here and actually
talk to us about thatbut the the
long story short is once your loan hits
20% loan to value in other words once
you have at least 20% equity in your
house then you are eligible for your PMI
to drop
off however there is there are a couple
of aspects to that your bank is not
required to drop it let's say you have a
conventional loan where it where your
PMI can drop off once you hit 20% equity
in your house your bank is not required
to drop that until you actually hit 22%
Equity okay so you actually will be
paying probably for at least a good year
extra than you need to if you don't keep
up with that you you may be paying
substantially morefor your loan than
you need to and PMI really varies I mean
I've seen ityou know it can be $50 a
month $100 a month $200 a month it
varies on a variety of factors based on
a variety of factorsbut whatever the
case may be you don't want to pay more
than you have to so here's the thing
when you purchase a home you get what's
called an amortization schedule it's one
of these crazy several pages long
documents that basically shows you okay
here is your first payment here is how
much principal towards your your
mortgage that you're paying here's how
much interest you're paying here are the
other aspects of of what you're
potentially paying again depends on how
the loan is structuredand then it
shows you okay here is your actual
principle
following the the payment right and then
it shows you every single payment if
it's a 30-year loan it shows you 360
payments what happens to your loan so
once you get to the point where that
original number so let's say that for
instance you bought a $200,000 house you
need to get have paid down
$440,000 of your principal before you
can get your PMI dropped however the
bank is not required to drop it until
you've reached
$44,000 okay follow me nowyou might
think okay well this probably doesn't
take very long no it takes a long time
because the way amortization works over
the course of a 30-year loan you're
paying almost no principle at the
beginning of your loan you're paying
almost entirely interest right at the
beginning of a 30-year loan it's not
until really Midway through that you
start like after you've owned the home
for 15 20 yearsbefore and if you've
are still on that same original 30-year
loan that's when you finally start to
see and you can look at your am ation
schedule if you still have a copy of it
that's when you finally start to see
that you're paying more principal than
interest so it takes a long time if you
only put down three and a half or 5% on
your house it takes a really potentially
a really long time to get to
20% of that original numberthat you
bought the house
for so here's what I did I refinanced a
few years ago my house and they told me
this is the date this is the actual date
that you where you will reach 20% Equity
based on your purchase price or or based
on the pricethat this loan is based
on because it wasn't a purchase price
because it was a refinanceonce you
reach that number then or once you reach
that date then you need to reach out to
your lender and let them know hey I am
at 20% Equity I need my PMI dropped well
it occurred to me the other day and by
the other day I mean a few months ago
that we've seen the past year a 20%
increase in pricesnow historically
that has not been the case we've never
seen such insane price increases but I
was like why wouldn't I be able to get
my PMI dropped now technically I wasn't
supposed to be able to have it dropped
until 2026 that was when I was finally
going to reach that point of being able
to drop it now I had I had put
originally 10% down on my house so it
was a little bit quicker thanwhat
would have been you know for a lot of
people that are putting more like five
or or like I said three and a half or
maybe even 3%
down so I was thinking about this and I
was like I know and and obviously I know
my neighborhood and whatnot I know that
I have 20% equity in my house from the
standpoint of what the market what has
happened in the market and what has
happened specifically in my neighborhood
so I was like I need to try to figure
out a way to get this PMI dropped there
is no it does nothing for my loan it is
just a an extra fee that I'm having to
pay because I didn't put 20% down when I
first purchase this homenow there is
another way that you can do this you can
alsodo what's called recasting your
loan which is which then allows you to
pay an extra amount towards
towards what your loan is or you can
also just make an extra principal
payment as welland I'm again I'm not
going to get into the Weeds on that but
when you're making a payment on your
house you can make extrapayment
towards the principal and that could
then bring your Equity up I didn't want
to do that I knew I didn't need to do
that I like to keep my cash on hand
because as you guys know I also invest
in real estate cash is King you need to
have cash to invest in real estate so
all of that to be saidI've started
exploring with my lender what I could do
in order to get my home value reassessed
now backstory I get mail constantly from
the lender which my loan has been sold a
couple of times now this is what happens
when you get a mortgage with a bank they
typically will sell your mortgage to
another bank and then that bank may sell
it and they're all rebalancing their
portfolios and so you might have a
different you might have five or six
different lenders over the course of
your loan well the lender I'm with now
is freedom mortgage and freedom mortgage
is constantly sending me mail saying
your house is worth XYZ more than when
you bought it so why don't you go ahead
and do a refinance so I'm like hm okay
their automated system believes that my
house is worth what it needs to be worth
in order for my PMI to be dropped so I
feel like I have a pretty good chance of
them actually taking this seriously so I
reached out to them and I I called
Mainline I was just like hey I want to
look into getting my PMI dropped and
they were just like okay we've got to
connect you to another department call
you know they connected me to the other
department I speak to another person on
the phoneshe was like okay you know
let me let me look into this she puts me
on a very long holdshe comes back to
me and she says Okayit it did not
give me the message it normally gives me
which is probably a good thing that's
what she said to meI guess she
probably gets a lot of these phone calls
and it probably just automatically just
rejects based onbased on the the
value in their system not being high
enough but again remember I'm getting
mail from them that's telling me that my
value is high enough so their system
when I make request it says it gives her
the green light so she says Okay I I got
a different message than I normally do
it says that if you're set up for
email alerts then you'll get an email
from Freedom mortgage within 10 business
days or something like that if you're
set up for for mail for snail mail USPS
mail then you'll get it by mail it was
like okay all right so again I the
nothing has been set up yet like they're
all they're doing is saying that they
will look at it and then send me either
an email or mail well Freedom mortgage
is very confusing in terms of their
setup I'm I have everything electronic
but I cannot for the life of me figure
out how to get their normal mail that's
sent to me sent to me by email I get
constant mail in my mailbox from them
and I can't stop it so I knew what was
going to happen I knew that I was is
going to be getting like actual mail
from themnow here's the thing about
getting your PMI dropped Banks don't
like it why because if you drop your PMI
now your mortgage is going down and now
you're less likely to get a new loan
whether by refinancing or whether by
purchasing another home that's that's
the thing is that they're constantly
sending meoffers of like hey why
don't you sell your home and buy a new
home your home is worth this you can get
you know another home
comp you know for a comparable price
blah blah blah blah blah they want new
business they that's all they care about
they just want new business it once you
drop your PMI you're basically saying
without saying it hey I plan to live in
this house for a while longer at least
otherwise why would you drop your PMI
why would you go through that Hassle and
so they don't want you to drop your PMI
they are and again somehow they worked
it out with the government and to me
this is Criminal
but they don't legally have to drop
it until you've already not just gotten
to that 20% threshold but until you've
reached
22% and prior to that you have to reach
out to them to let them know once you've
reached 20% okay all of that to be said
I start waiting right I'm waiting
waiting waiting waiting what am I going
to hear from them so I am signed up for
on
USPS.com to get basically scans the the
day that my mail is coming in I I can
see they scan it and they send it to me
by email here's the here's a copy of the
envelopes that you have coming in so I
see oh here we go here I'm I'm getting
something from Freedom mortgage let's
check it out I get it I open it up it's
another spam mail trying to get me to
refi I'm like no I don't want to
refinance I just want my PMI drop it's
okay I I suspected it would take a while
I wait a few more days I see in my email
from
USPS thatI got something else from
Freedom mortgage now this is different
than anything else that I had gotten
from them all of their letterheads are
real fany it's got like gold you know
gold colors and and all sorts of
different things this one was just
straight black and white printed on low
quality a lowquality envelope all of
that and so I got excited cuz remember
they don't want you to drop their P your
PMIso what my conclusion was when I
saw that there was an envelope coming in
that wasn't as good-look as the others
they were trying to get me to throw that
away because they don't want me to go
through with this so I got it I opened
it and sure enough it was here is
instructions for how you can potentially
drop your PMI now what I was wondering
was how they would determine the value
of my house I assumed they would
probably require an appraisal they
actually didn't what they required was
what's called a BPO a Bo is a broker's
price opinion and it's done by another
realtor or broker it's not done by an
appraiser well that was something that I
was very happy about a is cheaper it
cost me
$105 an appraisal would be probably
$400but also I as some of you guys
know I live in a basement Home South
Carolina appraisers hate basement homes
they don't there there's I did a whole
podcast on this go back and and search
for it if you want they don't like
basement homes but fellow realter
understand the value of basement homes
there are so many people looking for a
basement home and there's like none of
them in the upstate of South Carolina we
have very few finished basements in this
area and a lot of people looking for
them and so they actually add value to
your home but appraisers take away value
for it well knowing that it was going to
be a fellow realtor that was actually
going to be looking at my home I was
like okay this is good this is exactly
what I want to seeso the page that
they sent me right they they sent me a a
page in the mail again with the
instructions extremely confusing like I
am pretty good at following instructions
I was a 4.0 student my entire life
College High School all those things I
had to reread these instructions so many
different times to understand exactly
what I needed to doand they were
incomplete instructions like it said you
will need to send us a this filled out
page as well as
$105 to pay for the BP in order for us
to move forward with your requests it
did not say who the $15 needed to be
made out toit did not say do I need
to annotate anything on the $15 it did
not say how I needed to pay the
$15 could I do it by credit card somehow
did it have to be by check could it did
it need to be personal check did it need
to be a cashier check there was
absolutely no information on any of
these specifics that you would think
would be important to a financial
institution but no they
were kind of scarce on details so I was
just like you know what I'm just going
to write a check to the the name the
exact name that they have on the letter
head I'm going to mail this it didn't
say where any of this was supposed to be
mailed there I assumed it needed to be
mailed to the address that was the
return address on on the letter
head and so that's what I did put it in
the mail and then waited about a week
later I saw on my bank account that the
check had been cashed and I was like ooh
this is interestingnow you know now
maybe we we'll have
something worth waiting for May maybe
maybe I'll actually hear from from
someone's something concrete sure enough
I think it might have been the same day
or like the day after I've received a
phone call from a realtor that I had
never communicated with before telling
me that she was the one assigned to do
the BP the Burger's price opinion and
I was like great perfect so she was we
and we were prepared for this you know
we had we had been doing some cleaning
and and doing some other things so now
it was like okay here we go she was
ready to come out the next dayso she
comes out and here's the interesting
thing I I I really expected that she was
going to be measuring my home that she
was going to be taking detailed notes
she said said that normally she has an
app that basically does like a 3D scan
of every room and comes up with
approximate measurements and she said
that in my case all she needed to do was
take photos which I thought was very
interesting I was like okay so you only
need to take photos again I think that
they I think that freedom Mortgage in
this instance was relying very heavily
onon the data that they had in their
system alreadyagain this is going to
benefit me in a basement home it was
going to not most likely in their system
differentiate between above grade and
below grade square footage so that was
somethingagain that seemed to me to
be a positive so she was in my house for
maybe 5 to 10 minutes probably longer
than she would have been except that I
chatted up with hergave her my card
you know wink wink nod nod I'm also a
real I I kind of know what I'm doing as
well I wouldn't have requested this I
didn't say this of course but you know I
wouldn't have requested it obviously
if I didn't know what my home's value
was I I also you know kind of made a
comment about you know wow when I first
moved into this neighborhood home homes
were selling for $100 a square foot and
now they're like $150 a square foot
little you know just little things like
thatso she's very friendly she does
all her pictures she leaves all right
now we wait so like a week later I get
mail from from Freedom mortgage and
again it's on that poorly printed black
and white
paperI open it up and they and it's
like timestamped it's like dated like
two weeks earlier and it's like thank
you we have received your PMI drop
request and we are processing it it was
just like seriously like this was like
we've already had the bo you know it's
just the whole thing was kind of
ridiculousbut I still don't know
what's going to happena few days
later maybe a week later I get another
piece of mail from them says we have
received your payment for the Bo and we
are working to get this scheduled again
it was like multiple weeks behind up to
this point then finally a week or so
after that I've received mail from them
saying congratulations your PMI requests
to to have the PMI drop has been
approved you will no longer have to pay
PMI I will now be saving I think in my
case I I have to go back and check but I
think it was about $60 per month I will
now save $60 per monththat I would
have been paying for for four years for
for four more years I did not have to
pay so you know that's $700 a year that
now I will be saving for the next four
years and this is something I would have
still had to go go through this entire
process four years from nowwhen I
reached that 20% level per the original
loan to value I just went through it
early because I knew that my home value
was already at that level and so
honestly I don't know anyone else that
has gone through this process as quickly
as I did but given the way the market
has shifted I think anyone who has
bought a house greater
thanat least 18 months from now like
if you bought a house 18 months ago or
earlier than that and you're paying PMI
you need to go ahead and unless the $15
is you know just going to be way too
much money for you or whatever whatever
it is that that your bank requires might
not be $15 that was just that was just
Freedom mortgagebut if you're in a
house that you bought 18 months ago or
earlier than that and if you see
indicators and honestly I'm happy to
help you with this I I'm I'm offering
right now this is a free offer to any
anyone that's listening to the show if
you're in the Greenville area if you
want me to assess your house to give you
my personal opinion which may not line
up with with what your lender's opinion
is or what you know if they tap into a
Bo or an appraisal or whatever can't
guarantee that that our opinions will
align but I'm willing to assist anyone
on anyone that's listening to this
ascertain whether I think that you have
20% equity in your property right now
happy to do that for you there is there
are a variety of ways that that we can
go about that it's much easier if you're
in a subdivisionif you're not in a
subdivision then it's much riskier if
you're in a unique propertythen
again it's it's not as likely to be
accuratejust from the standpoint of
different different people that look at
the property will have different
opinions but if you're in particularly
if you're in a subdivision it's usually
pretty easy to figure out and that was
the case with me I live in a subdivision
but even if you don't I'm happy to
help you guys out you need to take
advantage of this there's no point in
paying an extra five six 700 $1,000
whatever the case it is that you're
paying per your PMI the the entire
Market has gone up by 20% in value the
past year you have you almost certainly
have 20% equity in the property that you
purchased and you can save yourself
money every
month a dollar saved is a dollar earned
or whatever that phrase is a penny saved
is a penny earn I don't know I don't
know what that phrase isbut the
point is you we do a lot of work trying
to earn money but sometimes we don't put
in the work to SA save money this is
easy money to save you don't have to
change anything in your lifestyle you
don't have to cut anything out all you
need to do is do a a little bit of
research with your lender call them fill
out some information send them a little
fee which hopefully you can afford and
and then let the process play itself out
the worst thing that can happen is that
you lose that money which hopefully it's
comparable to the to the $15 I had to
spend worst case scenario is you lose
that money and they tell you sorry it's
been declined that's not that terrible
of a situation so I want to encourage
all of you guys to consider that if you
purchased a house you know at in within
the past 18 months or earlier than that
and you're still paying PMI and even
like I said the the market has shifted
has gone up 20% in the past year so even
if you purchased a year ago you may
already be eligible for your PMI to be
dropped I would say it's a little bit
risky
it's probably less likely that the
lenders are you know that their
calculations and that the the you know
however they determine your value
whether it's an automated calculation
whether it's a BPO whether it's an
appraisal it's less likely after a year
that they're going to give you that that
20% even if we're pretty confident that
it's gone up 20% in value but it's worth
considering let me know I'm no longer on
vacation right I am backand I'm I'm
ready to it it doesn't take me that long
I'm I'm I've got this down to a science
how I determine home valuations and I'm
I'm happy to do that for you guys so
this is a lesson I saved myself over
$2,000 over over the next four years by
just putting in a little bit of time and
I'm sharing this opportunity with you
guys you might be able to save yourself
thousands of dollars by just putting a
little bit of time into this trying to
get your PMI dropped and again you never
know it it's wild things have happened
in the market the past couple of years
let it work to your advantage this is
something that you know you might see
home values going up and you might think
well this doesn't really help me right
now no it actually may help you right
now and so hopefully this show was
helpful for you I'm available my contact
information is in the show notes if you
need to reach out to me if you want me
to give you an idea of what whether your
home you know potentially has 20%
Equity whether you have 20% equity in it
reach out to me with my contact
information there I'll let you know what
information specifically that I need
there will be a few different pieces of
data that I'll need from youI will
need to know how much is principal is
left on your loan so you have to be
willing to share that with mebecause
otherwise I can't really help you I
guess technically I could kind of tell
you what I think your home is worth
without out and then you could determine
whether it's 20% I don't know it would
be easier if I could just kind of do the
calculation for you and kind of give you
my my interpretation but that is up to
youat the very least I just need to
knowthe address and the actual
square footage above grade and below
grade because I will have to account for
the fact that they might dis discount
the below grade square footage so
there's just some different things like
thatbut my contact information is in
the notes if you want to reach out to me
for that or any other real estate needs
that you have please hit the Subscribe
button perhaps even unsubscribe and
resubscribe to help bolster the show hit
the little fstar button leave a short
little review and we will talk again
next week
[Music]