Much like every other Texan, my property tax appraisal this year was insane. However, I now have about 75% equity in my home according to that appraisal. The market value of the home is much higher and would easily appraise for well over that amount, but that is obviously an additional expense that would be great to avoid if possible.

So with that being said, would a lender accept a property tax appraisal in lieu of a traditional home appraisal for the purpose of dropping PMI (assuming 100% on time payments for a number of years, no refi's, etc)?

That's an interesting idea..

My gut says no, but I'm not a lender. I say this since the CAD value is typically lower than MV for your home if you were to sell it. The lender uses the appraisal to ensure the collateral on the loan (your home) covers the risk (mortgage).

I want to see what a lender says on this.

you will need to hire an appraiser for sure.

Never heard on a lender using a CAD appraisal to remove PMI

Simple answer is no. You need an appraisal and it must be ordered by the lender. Or you can reduce the loan amount by principal reduction to show 22% equity from purchase price.

Behind that simple answer is a complex set of laws, rules and even contractual obligations.

SteveBott said:

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Simple answer is no. You need an appraisal and it must be ordered by the lender. Or you can reduce the loan amount by principal reduction to show 22% equity from purchase price.

Behind that simple answer is a complex set of laws, rules and even contractual obligations.

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This is correct as I understand it. It makes no sense that they wouldn't take a governmental agency's value over a single third-party appraisal but that is the system they have built.

To be fair the dramatic increases at CADs value is a first for me. This issue is brand new. Lenders could adjust but that is not their nature.

Diggity said:

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dallasiteinsa02 said:

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SteveBott said:

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Simple answer is no. You need an appraisal and it must be ordered by the lender. Or you can reduce the loan amount by principal reduction to show 22% equity from purchase price.

Behind that simple answer is a complex set of laws, rules and even contractual obligations.

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This is correct as I understand it. It makes no sense that they wouldn't take a governmental agency's value over a single third-party appraisal but that is the system they have built.

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It makes sense to me that a lender wants to use an appraiser who enters the home and runs comps based on that specific property rather than a mass appraisal system.

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This.

The bank just cares that the house is sufficient collateral. They don't care what a government agent, who cannot and will not buy the property, has to say.

If you've owned the home for at least five years, and your loan balance is no more than 80 percent of the new valuation, you can request PMI to be cancelled. If you've owned the home for at least two years, your remaining mortgage balance must be no greater than 75 percent. Rather than paying for a lender ordered appraisal, some lenders might be willing to accept a broker price opinion instead, which can be a substantially cheaper option.

Thank you all for the input! Sounds like i will just need to call up the lender and ask but not be too hopeful. Either way the price of an appraisal is probably worth the monthly savings.

Yep. Doesn't cost anything to ask!

Noname124398 said:

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Much like every other Texan, my property tax appraisal this year was insane. However, I now have about 75% equity in my home according to that appraisal. The market value of the home is much higher and would easily appraise for well over that amount, but that is obviously an additional expense that would be great to avoid if possible.

So with that being said, would a lender accept a property tax appraisal in lieu of a traditional home appraisal for the purpose of dropping PMI (assuming 100% on time payments for a number of years, no refi's, etc)?

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No

Read your PMI contract, they are all different

Ask for a desktop appraisal which should be cheaper than a full standard appraisal. Its usually less than full appraisal, but should be enough to get your PMI removed. That is what we did in similar situation.

Yes a desktop appraisel is about half the cost of a full one. But it is entirely a lender decision. And they maybe constrained by existing contracts with investors or the PMI company.

But asking is free.