Are you ready to get rid of PMI?

PMI can be removed from a loan under certain circumstances:

Situation 1
PMI may be canceled at the borrower's request if:
  • The loan balance has been amortized down to 80% of the original value (lower of the original sales price or appraised value); and
  • The payment history has been satisfactory; and
  • There are no subordinate liens on the property.

Write to the current loan servicer requesting that the PMI be cancelled. The loan servicer must respond to the request within 30 days of receipt of the request.

Situation 2
PMI will be automatically cancelled by the loan servicer (unless the loan has been classified as a high risk loan) if:
  • The loan balance has been amortized down to 78% of the original value; and
  • The payment history has been satisfactory.
Situation 3
PMI may be cancelled due to the build-up of equity through appreciation. This may be an option if:
  • An appraisal is performed by an appraiser approved by the loan servicer; and
  • The current appraised value demonstrates a 75% to 80% equity position (the borrower is responsible for the appraisal cost); and
  • A satisfactory payment history has been maintained.

The best approach under this situation is to contact the current loan servicer and request the specific guidelines for canceling PMI.

For more information consult a licensed mortgage loan officer.

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