What is PMI?
PMI stands for Private mortgage insurance, it is a type of mortgage insurance you might be required to pay for if you have a conventional loan. Like other kinds of mortgage insurance, PMI protects the lender—not you—if you stop making payments on your loan.
Can i get this waive?
Yes, with a down of at least 20%
How do i get rid of in ?
Pay down your mortgage
Request cancellation
Refinance
Reappraise
AN INVESTMENT IN KNOWLEDGE PAYS THE BEST INTEREST
How Much is it?
PMI typically costs 0.5% – 1% of your loan amount per year.
So in a Home with a sale price of $300,000 you will pay around $1,500 to $3,000 per year. this is charged monthly and is included in your PITI payment. For this scenario it mean about &125 to $250 per month.
Know your PMI rights?
On July 29, 1998 the Homeowners Protection Act of 1998 was signed, it includes the “PMI Cancellation Act”. This establishes provisions for canceling and terminating this insurance. The law states that the payment drops off when your loan balance reaches 78% of the original value of your home, but if you know your rights you can cancel at 80% (read below). .
Why do bank not remove PMI at 80%?
They will only at your request!
That is right, so in the example above if it take two more year to pay down your loan to 78% instead of 80%. This mean the lender will charge you around $3,000 to $6,000 for basically nothing. To be eligible for cancelation at 80% you must:
- be up-to-date on your loan payments
- You can’t have any late payments or be in default, once in good standing, the coverage will be cancelled.
IF you have any other question please email us at: [email protected]
