Home Ownership in Perris>Question Details

Jamie, Home Buyer in Menifee, CA

Mortgage Insurance

Asked by Jamie, Menifee, CA Tue Jan 15, 2013

How do I get my mortgage insurance taken off my loan payment? Do I just have my house appraised to show that I have 20% equity in my home, and submit the appraisal to the bank? Please advise.

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You question is a great one but I think that your lender is the one to whom it should be directed. It does not matter what advice we give to you if it is in conflict with your lender’s requirements.
0 votes Thank Flag Link Tue Jan 15, 2013
On an FHA loan, the MI remains on the loan for a minimum of 5 years irregardless of your equity position. If you have the money , you can refi into a conventional loan and drop the MI but that requires a 20% contribution.
There are tons of other details which I'm sure you will hear about...
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0 votes Thank Flag Link Tue Jan 15, 2013
Depends on what type of loan you have.

If it's an FHA loan, your loan balance needs to reach 78% of the home's value when you obtained the mortgage AND have paid at least 5 years of mortgage insurance.

If it's a conventional loan it's a little more complicated... as mortgage lenders or servicers must automatically cancel PMI coverage on most loans once you pay down your mortgage to 78% of the value when you obtained the mortgage AND if you are current on your loan. If the loan is delinquent on the date of automatic termination, the lender must terminate the coverage as soon thereafter as the loan becomes current. If PMI has not been canceled or otherwise terminated, coverage must be removed when the loan reaches the midpoint of the amortization period. On a 30-year loan with 360 monthly payments, for example, the midpoint would occur after 180 payments. Lenders are NOT required to consider the current value of your home, only the value when the loan was obtained... however it doesn't hurt to ask them to consider the current value, because in many situations they will (particularly if home values are rising). If you do want them to consider the current value, then you'll normally have to pay for the cost of an appraisal, and you will want to ask them ahead of time how that would be handled (so you just don't pay for an appraisal and expect them to use it, as they may require it to be done through a certain appraisal company).

Shane Milne | Lending in all 50 states | NMLS #81195
0 votes Thank Flag Link Tue Jan 15, 2013
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