More Articles on PMI
What is PMI?
How to Calculate PMI
How to cancel PMI
PMI or piggyback mortgage, which is better?
More Types of Mortgages
Fixed Rate Mortgage
Adjustable Rate Mortgage
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to Cancel PMI - Private Mortgage Insurance
Note that this law does not say that an increase in the value of the home qualifies you for cancellation. Many lenders will honor your request in that situation, but they do not have to!
Automatic Termination of PMI at 78%
The mortgage lender or mortgage servicer is required to terminate the collection of PMI when the mortgage has been paid down to 78% as long as you are current on your mortgage
High Risk or No-Conforming loans at 77%
the mortgage lender or mortgage servicer is required to terminate the collection of PMI when the mortgage has been paid down to 77% as long as you are current on your mortgage for high risk loans
For borrowers who were unable to meet the requirements of automatic termination, the mortgage lender or servicer is required to stop collecting PMI at the midpoint of the loan. In other words on a 30 year loan, after you have made 180 payments.
A note on Increased Value of your Home
You will notice throughout Daily Interest, I mention that as your house value increases, you may qualify to have your PMI removed. Most house go up in value as you own them.
Although not required by law to do so, most lenders will take this into account when considering to cancel PMI ad will accept a new appriasal showing that the value of the home has increased as long as the appraisal is done by an appraisor on their "accepted" list.
If you think the value of your home has increased enough to warrant the cancellation of your Private Mortgage Insurance premium payments, call your lender before you spend the money on an appraisal to make sure that they will accept your request. They also will give you the names and numbers of approved appraisers in your area.
The Following is a direct quote from a Consumer Alert put out by the FTC
about cancelling PMI (Private Mortgage Insurance) You can read the entire alert here
In order to have PMI cancelled, your loan must be no more than 78% of the value of the house.
The value of the house is what you purchased the home for. You may petition to have the bank or lender accest a new value for the home, but the bank or lender is not obligated to accept the petition.
- guide to Home Mortgage Loan Advice & Education for refinancing and purchasing
How to Cancel PMI - Private Mortgage Insurance Premiums description at DailyInterest.com