Private Mortgage Insurance (PMI) is required on a conventional loan when the down payment is less than 20% It will be removed once the equity on the home reaches 22% based on the original value. However, there are different ways to eliminate PMI sooner rather than waiting for the equity to build up based on the original price or value. Keep reading to find out ways to remove PMI without refinancing soon that you thought was possible.
When the lender provides the Private Mortgage Insurance Disclosure form , the removal date is from equity based on principal reduction based on the original value of the home. Does that sound like they’re leaving something out? It should!! It totally leaves out the price appreciation. Homeowners should be aware of the way to eliminate PMI without refinancing that includes both the principal reduction from payments as well as price appreciation. Removing PMI using this method can be done in as little as 2 years based on the market appreciation and original down payment. Watch this video to find out the best ways to remove private mortgage insurance without refinancing if you have a conventional loan. Unfortunately, this does not apply to FHA or VA loans.
To be able to remove PMI early requires the homeowner to be aware of the home’s current market value and keep track of the loan balance so that when 75% equity based on the market value is achieved, the borrower can request PMI removal in writing. The bank/lender won’t do it for you!
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To receive more information regarding PMI removal and the real estate market, reach out to me at 480-326-8571. If you need to refinance, I can refer you to a great lender.