You don't have to refinance or wait until you've made enough mortgage payments to get rid of private mortgage insurance (PMI). Upgrades that improve the value of your home can help you save the substantial amount of money going towards PMI.
The Money Under 30 blog notes several ways to get to that 20 percent equity that would get your mortgage lender to remove PMI. One of the fastest ways to do that is to add more value to your home through upgrades, then get the home reappraised:
Adding value to your home with upgrades is one way to help decrease your loan-to-value ratio. Remember, if your house is worth more money and you owe the same amount on the loan, you are getting closer to that 80 percent LTV where you can request that the PMI be removed from your loan.
Is digging up the backyard to put in a pool worth it? What about upgrading a tired-looking kitchen with gleaming marble countertops? And what about… Read…
Before you leap, though, note that not all upgrades will raise your home's value. Kitchen and bathroom remodels (or additions) tend to have a high return on investment. Remodeling magazine's Cost vs. Value report also suggest an attic bedroom remodel, basement remodel, and/or deck addition have both high ROI and resale value.
Like many other homeowners, I researched the heck out of buying my first home: what to look for in a house and location, what kind of mortgage to…Read…
Whether or not you think PMI is always a bad move, I think we can all agree getting rid of it as soon as possible is a good one.