[SossMan]

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I'm sure if you read your original loan agreement, you will see that they need an opinion of value to make sure that the property's value hasn't declined.

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I'll check this when I get home. Kind of crooked if you ask me. An appraisal will cost the equivalent of over a year of PMI in my case.

Why does it matter if the home value went down? Do they introduce some kind of loan amount to appraised value ratio?

Thanks for all your advice in these mortgage threads Sossman and Bicycles. I've learned a lot.

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It's always loan amount to appraised value. That's why you have to get an appraisal when you buy a house. On a purchase, the lender will always use the lower of purchase price or appraised value to determine the loan to value ratio.

For instance, if you got buy a house for 500k and it appraises for 550k and you want 90% financing, you will only be able to borrow $450k, not $495k.


Buyers with small mortgages, small home values tend to overpay on a % basis for a lot of the closing cost type items that are flat fees.

$300 for an appraisal on a $100k house is 30 basis points. $300 for an appraisal on a $1m house is 3 basis points.