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1. #SHOULD I REFINANCE OR JUST PAY IT DOWN TO REMOVE PMI HOW TO#
2. #SHOULD I REFINANCE OR JUST PAY IT DOWN TO REMOVE PMI PLUS#
3. #SHOULD I REFINANCE OR JUST PAY IT DOWN TO REMOVE PMI MAC#

How To Get Private Mortgage Insurance Eliminated From Your House Paymentġ. That could reduce your house payment by hundreds of dollars per month, which you can spend in other, better ways. You’ll want to ask your lender for more information on your specific loan.Ĭool! You probably qualify to get rid of PMI! And if your loan was FHA or USDA you probably cannot eliminate their version of PMI.

#SHOULD I REFINANCE OR JUST PAY IT DOWN TO REMOVE PMI MAC#

Note: some other situations could complicate matters, like Fannie Mae and Freddie Mac requiring you to have 25% equity if you’ve had your loan for less than 5 years. So, if you purchased a home before 2021 and are paying PMI because you made a down payment of less than 20% of your home’s value, inflation has very likely increased the value of your home to the point where you may now be able to have your PMI eliminated because your equity has increased to more than 20%! And prices increased even more than that in many markets. One thing many existing homeowners don’t recognize is that the value of a typical house in the United States increased by 18.8% just in 2021. Most lenders really don’t want to remind you of this, because they get a commission on your PMI payments, so it’s up to you to initiate the process of evaluating your loan to see if you qualify to have PMI removed from your payments. In other words, if inflation has increased the value of your home, that amount of increase is considered to be equity in your home. Have Mortgage Questions? We Can Help! Click Here Most mortgages contain a clause that allows you to request cancellation of PMI once you have had your loan for more than 2 years and the amount of your remaining loan balance is less than 80% of the value of your home. PMI Can Be Eliminated When Your Equity Reaches 20% Unfortunately, that takes years to get there.īut there is another way to get rid of PMI that doesn’t take a decade to accomplish… They also are required to eliminate PMI once you’ve reached the halfway point on your loan (15 years on a 30-year mortgage, 7.5 years on a 15-year mortgage.)

(This assumes that you’re current on your mortgage payments and don’t have a history of missing payments.)

#SHOULD I REFINANCE OR JUST PAY IT DOWN TO REMOVE PMI PLUS#

Your mortgage lender will look at your total equity (your down payment plus the total amount you’ve paid towards paying off your loan.) Once your equity has reached 78% of your original purchase price, they’ll automatically eliminate your PMI payment. Here’s how getting rid of PMI normally happens. Wouldn’t you like to just make that go away and use that almost $300 per month to pay for other things? 01 = $3,500, which would be divided by 12 to get a monthly PMI of $291.67. PMI typically costs 0.5% – 1% of your loan amount per year, depending on your down payment amount, your credit history, and the type of mortgage you have (PMI rates are usually higher for adjustable-rate mortgages than traditional fixed-rate loans.)įor example, let’s assume you have a $350,000 mortgage and your PMI rate is 1%. In other words, there’s absolutely no advantage for you to keep paying for it if you don’t have to. PMI is an insurance policy that you are required to pay for that pays your lender if you default on your loan. It is a required fee that you’ll most likely pay each month as part of your mortgage payment until you qualify to have it eliminated.Īnd while the name Private Mortgage Insurance sounds good (hey, it’s insurance, so it protects, you, right?) and there are some good things about it, it doesn’t insure you at all. It is a type of insurance you have to pay if you have a conventional mortgage (FHA, VA, and USDA loans have their own version), and your initial down payment was less than 20% of your home’s purchase price. PMI is short for Private Mortgage Insurance. Need a Second Opinion? Click Here for Help! I’m going to show you, step-by-step, exactly how to do that (don’t worry, if you qualify, it’s easy.) But first, let’s cover what it is and why you have to pay it. One way to do that could be by eliminating PMI (Private Mortgage Insurance) from your monthly house payment. In tough times, we’re always looking for ways to lower our expenses. Have Questions About Removing PMI Or Other Mortgage Issues?.Significantly remodeling and improving your home.Paying extra towards your mortgage principal each month,.Besides inflation, are there other ways to get rid of PMI?.What percentage of homeowners are paying PMI?.

The lender will probably ask you to pay for an appraisal of your property. Contact your mortgage lender and ask them what will be required to remove PMI from your house payment.