What is PMI and How Do I Get it Removed?

PMI stands for Private Mortgage Insurance. It’s typically required by lenders when you take out a conventional loan and put down less than 20% of the home’s purchase price as a down payment. PMI protects the lender in case you default on the loan.

How to know if you’re paying PMI:

Check your mortgage statement: Your lender or servicer should clearly list any PMI premiums on your monthly mortgage statement.

Ask your lender: If you’re unsure whether you’re paying PMI, you can contact your lender directly and ask.

Look at your loan agreement: PMI details, including cost and terms, should be outlined in the original loan paperwork.

How to get PMI removed:

Reach 20% equity: Once you’ve paid down your mortgage to where you owe less than 80% of the home’s current value, you can request that PMI be removed.

Automatic removal: Lenders are required by law to automatically remove PMI when the loan balance reaches 78% of the home’s original value, based on the original purchase price, but this might not always happen immediately after reaching that threshold.

Refinance: If you’ve built up significant equity (or if home values in your area have risen), you could refinance your mortgage to eliminate PMI, especially if your loan-to-value ratio is below 80%.

Request it in writing: If you believe you’ve reached 20% equity, you can formally request PMI removal. Your lender may require an appraisal to confirm the current value of your home.

Just keep in mind that different lenders may have different processes, so it’s a good idea to check with your lender for the exact steps specific to your mortgage.

Steve Cardinalli
Real Estate Professional, 01323509
(760) 814-0248
Steve@Cardinalli.com
www.Cardinalli.com
Century 21 Affiliated Fine Homes & Estates
Village Faire in Carlsbad Village
300 Carlsbad Village Dr, 223
Carlsbad, CA 92008

Be the first to know about the market trend in your community at Neighborhood News