Difficulty: Moderately Easy
Step1
Figure out the approximate net worth of your home and the amount you still owe (see most recent mortgage statement). Divide the amount you owe by the value of your home. If the amount is 0.80 or more, you have at least 20% equity in your home, which is what you want. (For example, if you owe $80,000 on a home worth $100,000, you get .80, meaning you have 20% equity).
Step2
Contact your mortgage company and find out the requirements to have your PMI removed. By law, the company must automatically drop your PMI if you have 22% equity, no other liens on the home and a good credit history. When I called Countrywide to have my PMI removed, I had to wait an extra few months until the two-year anniversary of my loan; which is typical. for many lenders.
Step3
Follow up with your lender, submitting required paperwork and scheduling a professional appraisal, if required. Start the paperwork a month before your two-year anniversary to ensure it is removed right away when all requirements are completed.
Step4
Use the extra cash each month to improve your house, pay down your mortgage more quickly, or otherwise improve your finances.
Comments
WriterGig said
on 6/9/2008 MidniteWriter--the funny thing is, we wrote them on the same day! Weird, huh?
MidniteWriter said
on 6/9/2008 This fits in nicely with my PMI article. I just think no one should have to pay this!! It doesn't help the homeowner, only the bank which has too much already!
Great article!
FabHelper said
on 5/22/2008 I didn't know about the 2 years either. I've been thinking about getting rid of my PMI but I haven't had the loan for 2 years until next month. I'll the lender then. Thanks!
amylaine said
on 4/30/2008 Great info.
Gracie1402 said
on 4/30/2008 I didn't know that about the 2 year waiting, interesting. 5 stars!