How to remove PMI (private mortgage insurance)?


According to the Homeowners Protection Act from 1999, borrowers are informed on how to remove PMI (private mortgage insurance) at closing.

Removing PMI (Private Mortgage Insurance) Requirements

Generally, your mortgage LTV has to reach 80% either based on payments, or on amortization schedule, and there must be evidence that house value has not declined, and no other liens exist on your home. A borrower could exercise the right to request removing PMI if he has not been delinquent for more than 60 days for the last two years. The PMI removal request must be submitted in written form.

An automatic PMI removal is required by law if mortgage balance reaches 78% of the value of the collateral. If the borrower is not currently on track with payments, removing PMI (private mortgage insurance) occurs when delinquency is resolved. PMI will be removed automatically when the mortgage loan reaches the scheduled midpoint amortization.

Loans made prior to issuing the Homeowners Protection Act from 1999 are exempt from its provisions. So are mortgages on multi-unit properties, second homes, or high-risk loans. Discuss with your lender whether PMI removal applies to your mortgage.

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