PMI can be a Pain to Remove

After refinancing our mortgage in 2008 we have been able to pay down the principle to the point that we have a solid 20% in equity. That's the magical formula which should allow us to get rid of our Private Mortgage Insurance payment. I have been looking forward to this for sometime so when I knew we were getting close I called our mortgage company, Citimortgage, to see what we needed to do to remove the PMI portion of our payment.

It turns out it's not as easy as I though it would be. Surprise, surprise! After calling and getting transferred around, I finally got someone who was able to go over the process with me.

• First off, you have to formally request that the PMI be removed from your account. Thankfully that was easy enough to do since I was on the phone with them.
• Secondly, they will research our account on their end and then send us a letter within 8 weeks stating if we are eligible to have PMI removed.
• After about 5 weeks of waiting we got a letter from them in the mail. I ALMOST threw it out because I thought it was more junk mail from them trying to sell us on their bi-weekly payment plan. Luckily I opened it anyway to glance at it. That's when things became more complicated
• Thankfully they agreed that it looks like we are eligible to have PMI removed from our payment BUT first we need to hire a Citimortgage appraiser to re-appraise our house. As my niece would say "Aww... man..". I was bummed. You see, my husband and I bought during the housing boom and I'm not sure what our house would appraise for nowadays. But that's not all of it.
• The Citimortgage appraiser would cost us about $350 out of pocket and if they appraised the house for less than a certain threshold we wouldn't be able to drop our PMI after all.

Now, I don't usually think of myself as a conspiracy theorist but I just don't trust Citimortgage to send out an appraiser who will do a fair job. They're hurt for money right now just like everyone else. I'm sure my mistrust isn't helped at all by the fact that we have had some shady appraisers in the past that didn't give us a fair deal.

Something else we had to take into consideration is the fact that we're only paying $15 per month in PMI. If we break down the $350 that means that it would take 23 months, or 2 years, to get a return on our investment. And again, that's only IF it appraised for a certain amount. So given the facts my husband and I have decided to wait and take a look at it again next year. I'm bummed, but at least we're paying off that principle much faster in the mean time. I look forward to the day when we can kick PMI to the curb for good!