Posted by ken in sc on March 12, 2002 at 12:27:32:
It has always been the policy for lenders that on a purchase loan they use the appraised value or sales price - whichever is lower - to run there numbers on. This is just another way for them to protect themselves from one number being wrong. And they have always required mortgage insurance on loans with over 80% LTV. Again, to protect their interest.
You may be able to get out of mortgage insurance earlier. Have your lawyer check RESPA laws.