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LTV (loan to value)

i am going to apply a loan. i put down 20% to maintain ltv of 80% to avoid  paying pmi. if next year or 2 year later, my home value is going down, so do i have to put some more money down to maintain ltv of 80% to avoid paying pmi?
  • February 13 2012 - US
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Answers (6)

There's not a risk of having pmi added to your payment later during the term of your loan.  However, if the value drops it can limit your ability to refinance with favorable terms and if you have a balloon note the L-T-V ratio would be reevaluated at that time.   
  • February 14 2012
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nntong is planning a cash in refi, not a purchase.
  • February 14 2012
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Have you considered putting less than 20% down, asking the seller to pay the mortgage insurance for you at closing, and bank the difference. It may make more sense depending on where you are buying.
  • February 14 2012
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You will not have to purchase mortgage insurance if you put 20% down, and if the property loses value the lender will be at risk and cannot require you to purchase mortgage insurance.
  • February 13 2012
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Profile picture for daveskow

No ...mortgage insurance  will not be added  if the lty goes over  80%  after you close on your loan

  • February 13 2012
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nntong2007, NO.  if your home lost $100,000 in value the day after you refinance and your loan to value goes from 80% to 140% there is no mortgage insurance added after the fact. 
  • February 13 2012
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