Question:

How long to pay monthly mortgage insurance payment?

Answer:

Monthly mortgage insurance payment is made until 20% equity is reached. At that time the borrower may request that the lender cancels mortgage insurance. Lenders are required to cancel the monthly mortgage insurance payment automatically once the loan balance is reduced to 78%, if the borrower is on track with their mortgage. Or, the monthly mortgage insurance has to be cancelled no later than the loan amortization midpoint is reached.

Depending on the loan amount, rate, term and down payment the time to reach 20% equity will vary. Even when desired equity is reached, you have to be current with the monthly mortgage payments to request mortgage insurance cancellation.

Mortgage insurance is paid upfront at closing and then is included in the monthly mortgage payment (PITI - principal, interest, tax, insurance).

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