Dear Sirs: I am writing to request the cancellation of the Private Mortgage Insurance (PMI) policy attached to my mortgage. As you are aware, Federal law allows for the cancellation of PMI when certain LTV ratios are met through the normal amortization of a mortgage, or amortization coupled with market appreciation.
How do I request to remove PMI?
To remove PMI, or private mortgage insurance, you must have at least 20% equity in the home. You may ask the lender to cancel PMI when you have paid down the mortgage balance to 80% of the home’s original appraised value. When the balance drops to 78%, the mortgage servicer is required to eliminate PMI.
When can a homeowner request to cancel PMI?
80 percent
You have the right to request that your servicer cancel PMI when you have reached the date when the principal balance of your mortgage is scheduled to fall to 80 percent of the original value of your home. This date should have been given to you in writing on a PMI disclosure form when you received your mortgage.
Can you eventually get rid of PMI?
Although you pay for PMI, the coverage protects the lender, not you, against the risk that you’ll stop making your mortgage payments. You may be able to get rid of PMI earlier by asking the mortgage servicer, in writing, to drop PMI once your mortgage balance reaches 80% of the home’s value at the time you bought it.
Can PMI be removed without refinancing?
Not all homeowners have to refinance to get rid of mortgage insurance. Homeowners with conventional loans have the easiest way to get rid of PMI. Or, the homeowner can request that PMI be removed at 80% LTV instead of waiting for it to be taken off automatically when home equity reaches 22% (78% LTV).
Where can I get a cancellation letter for my PMI?
The first step… Contact your “loan servicer”. This is the lending institution where you send your mortgage payments. This may or may not be the lender who gave you the loan originally. Your loan servicer will be able to help you with the cancellation procedure and will also be able to tell you your remaining mortgage balance.
When to request that PMI be removed from a mortgage?
You have the right to request that your servicer cancel PMI when you have reached the date when the principal balance of your mortgage is scheduled to fall to 80 percent of the original value of your home. This date should have been given to you in writing on a PMI disclosure form when you received your mortgage.
What do I need to do to get rid of PMI?
Compare your “loan to value” (LTV ratio to that required by the lender. Most lenders require that your LTV ratio be 80% or lower before they will cancel your PMI. Note: Some lenders express the percentage in reverse, requiring at least 20% equity in the property, for example.
Do you have to pay PMI premiums at closing?
While you needlessly pay for this PMI Policy, your lender is making money that is rightfully yours. The majority of mortgages with PMI have required the homeowner to pay a full year of premiums in advance at loan closing with additional escrow payments accumulating monthly as a portion of monthly mortgage payments.
