How to Cancel Private Mortgage Insurance(PMI)
You can cancel your Private Mortgage Insurance if:
- Your loan balance has reached 80% of it's original value, you have made timely payments, and you have no subordinate liens on your property (a second TD as an example).
- or Your "Equity" has built up through appreciation backed by an approved licensed appraiser.
If you purchased your home after July of 1999, federal law requires your lender to inform you when you loan balance reaches 78% of its original amount.
However if your loan was sold to Fannie Mae or Freddie Mac, you have a much easier road to navigate. These federal secondary market makers have much better cancellation rules than the Federal law.
As long as you have been timely with your payments and your home loan is over two years old, These two institutions have instructed their servicers to cancel the PMI when the loan to value drops below 80%. All you need to do is call the servicer and tell them you believe your loan to value ratio to be below 80%.
The servicer may give you names of approved local appraisers. depending on how much you have overpaid you may be due a nice hefty rebate.
So what can you do?
- Find out your equity position.
- Call or write your loan service company and ask them for your exact loan balance.
- Ask your loan servicer (not the PMI insurance company) for their PMI removal Policy.
- Go to home gains' PMI removal calculator. You will need PMI Payment/Month, your purchase price, your original down payment, current outstanding loan. This will give you your equity level and your qualification for PMI removal.
- If you qualify, then you will need to prove this thru an accredited state appraiser. It will cost you around $400-$600.