How to Get Rid of PMI on My Mortgage

PMI is an acronym for private mortgage insurance. This is a fee that is added to the normal payment of monthly mortgage for the sake of protecting the lender from non-repayment. This is conditional and is never applied to all the mortgages. It is only applicable when a person pays less than 20% of the value of the home as a down payment. If a person is a high-risk buyer, it will be applied by the lender even if he pays more than 20% as down payment. PMI application is applied upon the discretion of the lender but a buyer should never be worried if he has a reasonable credit score. Payment of 20% is a must for anyone who does not want to pay PMI.

You can get rid of PMI repayment on your mortgage by asking your lender to have it concerned. It is not as easy as walking into the offices of the lender and asking for cancellation; one has to show that he is worth the cancellation and this means that he will have to justify the cancellation by proving that he has now paid at least 25% of the value of the house. In other words, you need to have already paid off 25% of the value of the loan to get rid of PMI. When this is translated in terms of your principal balance, you need to have 75% (this percentage varies from lender to lender) of it remaining to get rid of PMI.

Make a calculation of your LTV value percentage since this is one way of convincing your lender to get rid of your PMI. If the LTV rate is less than 80%, you are justified to have it removed. You will no longer be charged PMI if this is the case.

Get an appraisal of the home done. Contact your lender and schedule one, as most lenders will not accept an appraisal that has not been scheduled by them. The value of your home needs to be more than the balance of your loan by at least 20% if you want your lender to cancel PMI. Depending on your payments of PMI, you may not be able to get this cancellation as fast as you want. There are some people who are considered high-risk because of their habits of PMI payment. People with good repayment habits will get what they want as fast as they want.

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