How hard is it to cancel PMI?

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.

Private mortgage insurance is a monthly expense tacked onto mortgages for home purchases in which you made a down payment that was less than 20 percent of the home’s appraised value. Basically, PMI protects your lender in the event you default on your mortgage and the lender must sell your home.

If your home’s value went up since closing, you may be able to cancel your PMI earlier, based on its current value. In some cases this can happen if you’ve made significant improvements to your home. You’ll need to get a home value assessment to confirm its value.

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Wait for automatic cancellation. Eventually, your mortgage insurance will fall away. Your lender is required to cancel your PMI when either of these things happens: Your mortgage reaches 78% loan to value. The federal homeowners protection act of 1998 requires lenders to terminate PMI, free of charge, at that loan to value ratio.

When your new conventional loan balance reaches 78% of the home’s value, you can cancel conventional PMI. Some lenders and servicers will even let you cancel when you reach 80% of your home’s current value. In as little as two years, you could be rid of mortgage insurance forever.

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Automatic PMI termination. Even if you don’t ask your servicer to cancel PMI, your servicer still must automatically terminate PMI on the date when your principal balance is scheduled to reach 78 percent of the original value of your home. For your PMI to be cancelled on that date, you need to be current on your payments on the anticipated termination date.

(the PMI Disclosure requires no late payments in the last 24 months. But nowhere does it say I must have had a loan for 24 months). I don’t want to send them a huge check unless I have some reassurance that they will drop the PMI when I request it, and they are saying they won’t.

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