PMI, aka private mortgage insurance, enables individuals to buy their home with less than a 20% down payment. If you are one of the many people that is paying for PMI, at some point you have probably asked yourself “when can I stop paying these monthly PMI fees?” To be sure, there are many other things you would rather do with that money.

Each month when you make your mortgage payment, do you give any thought to exactly what that payment includes? For some of us, the mortgage payment pays down the mortgage loan, but also a portion goes into an escrow account to pay for property taxes and a variety of different types of insurance including homeowners and PMI.

If you purchased your home with a conventional loan and put less than 20% down, it’s highly likely you are paying for PMI. Private mortgage insurance protects the lender or investor against a loss if you decide to stop making the payments for any reason. Shockingly, a lot 0f homeowners pay this insurance long after it’s required simply because they haven’t realized that the property values in the area have increased sufficiently to give them an equity position of more than 80%. As a result, homeowners often pay thousands of dollars in unnecessary PMI premiums every year.

With a professionally prepared appraisal, the homeowner with PMI can determine whether the insurance is actually still required by the lender. Once you reach an 80% LTV (loan to value ratio) in your home by appreciation, improvements, paying down the principal balance or any of the above, you can request the lender to cancel the private mortgage insurance. You have to request, in writing, that the PMI be canceled and provide the lender with proof of sufficient equity of at least 20%. An investment of a few hundred dollars in a quality appraisal report by Appraisal 911 Group could save you thousands over the life of your loan.

The Homeowners Protection Act requires lenders inform homeowners of any PMI they are paying and the requirements necessary to cancel it. Don’t wait for the lender to notify you that you are eligible to get rid your PMI. In most, if not all, cases, when you have that equity and you have not canceled. Your PMI it is for the lender’s benefit.

Step 1 is to contact the lender or the servicer and ask them what their process is for cancelling PMI. They will be able to help you with the cancellation process. Every loan servicing institution will have different procedures. Ask your servicer or lender to provide, in writing, their specific requirements to cancel PMI.

It’s in your best interest to keep the issues surrounding it’s cancellation in mind because no one is going to cancel your PMI for you. It’s up to you to stay on top of the situation. Take a proactive approach.

You are, ultimately, your own financial advisor, and even the smallest expenses should be eliminated if at all possible. By continuing to carry PMI, which is no longer required or needed, only decreases the amount of money you have available in your pocket or your bank account.
At Appraisal911 Group we look forward to helping people just like you to get rid of PMI insurance.

Call for your free initial consultation and we will help you to determine if you have enough equity in your home to cancel your PMI.

Call us today with any questions you might have or to get a quick quote and a turn around time for your project. Also, you may go to “order appraisal now” (no payment is due at this time), fill out order form and we will call you shortly with details about your order.