How to Stop Paying Private Mortgage Insurance (PMI)

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By Scarlett9284
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Stop Paying Private Mortgage Insurance (PMI)

How long have you been paying Private Mortgage Insurance (PMI)? Are you sick of paying this fee every month? Do you want the bleeding to end? Here are some tips to cancel PMI.

Difficulty: Moderately Easy

Instructions

Step 1

Most loans allow you to stop paying PMI if the equity is greater than 20%.
Step 2

If your equity is not quite at 20%, consider making an extra payment one month. The more money in the bank, the better off you are.
Step 3

Make certain that your account is up-to-date. Especially all of your payments. The lender will take into account your payment history when deciding whether or not to accept your request to drop PMI.
Step 4

Make a phone call. Call your lender's customer service number. Ask what the procedure is to remove PMI. This ensures that you follow the correct procedure and can only save time in the long run.
Step 5

If your house has appreciated in value or if you have done some remodeling or improvements, then you may want to get your house appraised. Depending on the appraisal value, you can take this information to your loan company and negotiate to have your PMI removed.
Step 6

Write a formal letter asking for PMI removal. Most companies require written notice of your request.

Tips & Warnings

Dropping PMI is worth it. It can save you hundreds of dollars a year!
Work with your lender company. If you are cooperative with their demands, they will be more accommodating to you.

Comments

hofbruner said

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on 8/6/2009 Could someone please explain what PMI is. If it's a mortgage insurance then why hasn't it paid off of some of the thousands of mortgages that went to foreclosure. Or is it just an extra fee they tack on that goes into oblivion.