This week starts out with a win. We put almost nothing down on our house when we bought it, because duh we were making $39K a year and that was an increase, a fairly dramatic one, from prior years. PMI was $53, eligible to be removed when we had paid 20% of the loan, which should be April 2022.
I’ve been paying extra on the mortgage, not a lot because duh we have three kids and a dependent mother-in-law and are only recently starting to dig ourselves out of holes. At any rate, I knew that if I wanted it to be removed when we only owed 80% of the loan, I needed to call. It’s not like they’d just stop taking free money without being asked.
My spreadsheet told me I would hit 80% in March 2020, but one day last week, while I was checking something else, I saw a little graphic that said we had paid 20% of the mortgage. I hopped on the horn immediately.
The little graphic was wrong, we had paid 19.95% of the loan. If I made a $15 payment, it’d push us over the edge, and take $53 off my next bill. The choice was obvious.
Except. The woman on the other end of that horn said it was possible I’d have to have the property assessed, even if I was at 80%. This was going to cost $120. I kept asking her to tell me yes or no if I would have to do it, but she couldn’t answer until the amount left on the loan was below 80%, and the $15 payment wouldn’t go through until midnight.
I don’t want to pay $120, but more than that, I don’t want somebody to come out to my house and pull out an abacus and tell me our house is worth less than the original loan. I realize that is unlikely, especially since we have waterproofed the basement, put in solar panels, redone a rotting bathroom, added a half bath, and replaced a rickety shed with an awesome one. But a friend of mine had her house assessed and it turned out to have depreciated, and I bet she has less sharpie on wallpaper than we do.
I started playing with numbers – would it be better to try to push it below 78% and face a lower probability of needing an assessment? Keep paying PMI for two more years just so somebody won’t judge my kids’ sharpie work?
I called in the morning, right after they opened. I needn’t have worried. The loan was under 80%, the PMI was automatically (well, automatically once I asked) removed. Done and done.
I had planned on continuing to pay my regular amount and just have more go to principle, but YNAB has made it clear to me that I need to be careful with every dollar, so I’m reducing my payment by $50 a month, putting that money toward other debts. I’ll still be adding three extra bucks to principle from before, and yet I’ll manage to have fifty more dollars to cover the cost of renting Sonya’s sax, which I had conveniently put on a credit card and forgotten about until YNAB yelled at me about it.
I just got a $636 (post-tax) per year raise!