“How do I remove my mortgage insurance?”
That’s a question we've been hearing, and today, we’d like to give you the answer.
If you want to remove your private mortgage insurance (“PMI”), take a look at your loan. If you have a government insured loan, like FHA or USDA, the only way to get rid of mortgage insurance is to refinance out of it into a conventional loan. We’ve actually helped a lot of people out with this recently, as home values have been going up while interest rates have slid down from their original rate.
If you have a conventional loan, there are multiple options available. You could refinance, or you could even contact the servicer and ask:
“Will you remove my mortgage insurance?”
A servicer won’t remove PMI if you’ve been making payments for less than two years.
Each servicer has their own guidelines and processes for removing mortgage insurance, but in general, you’ll have to have an appraisal (learn more about that process here). The appraisal will determine the home’s current market value, and the difference between that appraised value and what you owe is your equity. If your equity represents at least 20% of today’s appraised value, the servicer is in a better position to determine if they can remove your mortgage insurance.
Remember, it’s ultimately the servicer’s decision. A mortgage insurance policy is a policy you pay to protect their investment. They’ll have to be comfortable with you as a client, which is impacted by the number of payments you’ve made and if they've been made on-time.
You could even refinance your conventional loan into a new program. You could be looking into a loan to do some home improvements, or maybe you want to pay off some other debts.
Every scenario is different, and that’s why we encourage you to contact us so we can talk about your scenario and see what makes sense.