What is PMI?
Private mortgage insurance, also called PMI, 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 PMI cancellation
Refinance
Reappraise
An investment in knowledge pays the best interest
How Much is PMI?
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. You are charge monthly included in your mortgage 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 PMI. The law states that PMI payment drops off when your loan balance reaches 78% of the original value of your home. This will be done automatically by your lender.
Why do bank not remove 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 of:
- up-to-date on your loan payments
- If you have late payments, your PMI will be cancelled once your loan is in good standing
