If you purchased your home over the last couple of years with less than 20% down your payment might include PMI. PMI is the acronym for Private Mortgage Insurance. The good news is that this could be the right time to get the ball rolling to cancel PMI and reduce your monthly mortgage payment. This process can be as simple as checking with your lender and ordering an appraisal.
Before you jump to ordering an appraisal, check with your lender and see what their process is to cancel PMI. Find out if you can order your own appraisal to start the PMI removal process.
Like most of us, you’ve been paying your mortgage every month and the cost of living has kept going up. Everyone is reviewing their finances and looking for ways to keep their hard earned money in their pockets. Since PMI is bundled into your mortgage payment, it’s likely you’ve overlooked this money saving option. Today could be the right time to get your PMI removed.
If you’ve reached about 20% equity in your home it’s time to look into PMI removal. The Homeowners Protection Act requires lenders to make homeowners aware of any existing PMI and the process to cancel PMI. Sometimes all it takes to cancel PMI is an appraisal by a licensed appraiser submitted to your lender.
Equity in your home increases by improvements made, paying down the principal on the mortgage, and appreciation. You can request your lender cancel PMI; usually there is a brief form to be filled out and proof you meet the equity threshold. This proof can be obtained through an appraisal. In most cases if you have 20% or more equity you’ll be able to cancel PMI almost immediately.
But, before you jump on ordering an appraisal, check with your lender and see what their process is and if you can order your own appraisal to start the PMI removal process.