Eliminating Mortgage Insurance

Mortgage insurance (sometimes called Private Mortgage Insurance or PMI) is insurance that protects lenders against defaults.  Lenders typically require borrowers to pay mortgage insurance if they are borrowing more than 80% of the home’s purchase price.  These days many borrowers are unable to put 20% or more down when purchasing a home and are thus faced with having to pay PMI.  However, if you are tired of making mortgage payments that include PMI there are ways to eliminate it.

1.        Making payments towards the principle of the loan in order to increase the equity to 80% or more

2.        The power of home price appreciation raising the value of the home.

3.        Combination of 1 and 2. 

There can be many factors involved before a borrower can request that a lender cancel their PMI. Thus it is very important that the borrower consult the lender and their attorney before any steps are taken. 

Though it may seem to take forever before PMI can be canceled, when factoring home appreciation and the build up of equity in their home borrowers may be eligible sooner rather then later.

Comments

[Amazonian]

Does the requirement for PMI cary by states? A friend in Nevada told me a couple years ago that PMI is a thing of the past.

I bet lots of lenders are wishing they hadn't issued 80/20 loans!

I'm going to blog about this today. I'll mention your blog.

[Hypotheek Check]

Hi,

Thanks for the info about " Mortgage Insurance " and it is all about money matters,
insurance and security.The things to consider in this worldwide crisis.. . Now a days we need to track and secure our
money management due to recession problem.

Good luck for your further post!

Best regards,

Marc Jansen

[john beck]

The rush in building new homes in the past few years triggered higher number of purchase by speculators and first time home buyers using sub-prime mortgages.

[John Beck Property Vault]

Yes, indeed it is an very important tool that can be used for many daily purpose but very few of us are aware of it’s noncommercial use. I think this tool needs more publicity centered at common user.