by J Anthony Is
Question by ballstothewall: Is there any way of getting rid of my PMI on my mortgage without refinancing or getting an appraisal?
Answer by Charity S
As I recall you don’t have to have PMI after you pay off 20% of your house’s value.
Add your own answer in the comments!
PMI insurance on your mortgage guarantees that you will pay that mortgage or the insurance will pay your mortgage company your default amount. PMI (Private Mortgage Insurance) is automatically put on your loan when your equity is higher than 20%. In other words, if you borrow more money that 80% of what the house is worth (19%-0% down), the lender will automatically put that extra cost on for you to pay with your monthly payments and that can be quite a sum. IF you can prove that you have more equity in the house now, you can have it just removed. You can prove it by your tax assessment. Say your assessment is $ 100,000 and your mortgage balance is $ 79,999 or less, you can remove the PMI insurance off your mortgage. You have to ask, they won’t volunteer! Worth checking out. If you do refinance, it can only be for 80% of the value or you will get another PMI tacked on again. Appraisal, no, use your State Equalized Value from your taxes. Good Luck!
If you owe less than 80% of the original purchase price the lender will remove it if you insist, but you’ll have to be forceful with them as they really don’t like to take the PMI away if they don’t have to. If you still owe more than 80% of the purchase price but think your home has appreciated significantly you will have to get an appraisal to prove it. And if your equity turns out to be less than 20% they will not lift it no matter what…. the banking regulators require them to have PMI on loans with a loan to value ratio of greater than 80%.
The PMI is used as a lender’s “protection” in cases where the buyer finances more than 80% of the loan value for the property. So, if loan balance is less than 80% of the original note, I suggest contacting your financial institution and making this request. In the past, with lower interest rates, another option would had been for you to take your business elsewhere in case your bank were to play hardball with you. Just ask…and do your homework.
Food for thought.
There is a great article at diversifiedlender.com on canceling pmi