Removing PMI Insurance from your monthly mortgage payment

If you or anyone you know has a loan that has Private Mortgage Insurance attached it can be removed.  This additional cost applies when a home is purchased with less than 20% down.  To remove PMI:

  1. Once you’ve made enough payments to boost your equity to 20% of the original purchase price, you can ask your lender to cancel PMI.  By law, the lender must cancel PMI at this point as long as you have a history of on-time payments.  You can establish that the property value has not declined and there is not a subordinate lien — such as a home equity loan — on the property.
  2. If you can’t get PMI removed at the 20% level, it gets easier once you reach 22% equity (based on the original purchase price).  At that point, the lender must automatically cancel PMI as long as you are current on your payments.  For certain loans defined as “high risk” by the lender, you must wait until you reach 23% equity.

Loans by FHA and VA don’t apply this rule.  Any problems with a lender contact the Federal Trade Commission or our State Attorney General.

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