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Can I get rid of my mortgage insurance?

My lender required me to get private mortgage insurance when I bought my home. My equity is now about 20%. Since the initial reasons I had to get the insurance was because my downpayment was only 10%, how do I go about canceling the mortgage insurance now?

May 29, 2012 by Adlai from Greenwood, IN in  |  Flag
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2 votes
Thomas Jensen Level 16

Contact your lender. Generally (since I don't know your sitaution I can only speak in general terms), the lender will cancel your PMI if you are current on your payments and otherwise not considered a high risk loan.

Comment   |  Flag   |  May 29, 2012 from Portland, OR

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2 votes

Hi Adlai,

Thomas provided some excellent information. Here are a few other items to add to it:

If you have an FHA loan, generally you cannot drop PMI (Private Mortgage Insurance) for five years. If you refinance to a non-FHA loan, then the PMI requirements (if any) would be with the new lender.

Generally, your lender will want you to have the house valued. The reason is you may have paid off enough principal to bring the value of the loan down another 10%, but if the home's value has also dropped, you may not have 20% equity.

Contact your mortgage lender and find out what they require. It should be fairly straight forward, and while it may cost a few dollars to have your home appraised, you will save in the long run by not paying the additional amount in insurance.

Comment   |  Flag   |  May 31, 2012 from Permanente, CA

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