7 minute read. Private mortgage insurance, or PMI, is what you pay to insurance the mortgage loan on your home. If you’ve been paying your mortgage insurance premium for years and you want to find out how to get rid of PMI.. Were going to show you some of the strategies you can use to remove PMI and lower your monthly mortgage payment.
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PMI is is a form of insurance that mortgage lenders use to reduce the risk of loss on low down payment mortgages. lenders typically require it on mortgages for more than 80% of a home’s value. Basically, PMI will get the bank some of its money back if you default on your loan. PMI doesn’t cover the entire value of the mortgage, of course.
Enjoy! Question: I believe the value of my home has increased substantially. Can I leverage this to remove the (Private) Mortgage Insurance from my mortgage? Jake Ryon of First Home Mortgage explains.
Borrower-Initiated Termination of Conventional Mortgage Insurance Based on Original Value of the Property The servicer must take the following steps to evaluate the borrower’s written or verbal request for MI termination due to reduction in the UPB through the payment of scheduled monthly payments or an unscheduled curtailment:
Process for PMI Removal. When requesting private mortgage insurance removal, start with your lender. Do it formally, through letter, and ask what its guidelines are for getting PMI off the loan.
The same was true if you refinanced with less than 20 percent equity. Private mortgage insurance is expensive and if you are paying it, there are ways you can remove it after meeting some conditions..
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PMI protects your lender, not you, yet you're the one who has to pay for it every month.. Cancel your PMI when you reach 20 percent equity.
If you signed loan documents before July 29, 1999 you will have to manually terminate your private mortgage insurance once you reach 20% equity in your home, or 80% LTV or less. Be careful to pay special attention to this as the lender or bank is not required to notify you, and you will continue paying PMI if you fail to act.
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