When to cancel PMI

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How and When Do I Cancel PMI?

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Hi Tim,

I think I can provide you with some information regarding this.

Actually your lender may automatically terminate your PMI or private mortgage insurance when your equity reaches 22% of the original value of your property, that is, the value at the time of taking the loan.

But you can always request your lender to cancel the PMI rather than waiting for him to cancel. When your equity reaches 20% of the original value of your property you put a request with your lender to cancel it. If your mortgage is owned by Fannie Mae, your PMI can be cancelled when the loan balance goes down to 75% of the current home value as established by a new appraisal. But the loan must be two years old and the mortgage payments should have been made in time.

You should know what your principal balance has to be so that your PMI can get cancelled. After that you can try to obtain an amortization schedule of your loan which helps you to know when you reach that point.

You can always give a call to your lender, if you are uncertain whether you are paying PMI. If they say yes, then ask them for the details on when and how to cancel it. It can be easily done by you only, without depending on others.

The few things which you should take care of are ?

You should have made your mortgage without failure for at least the last year.
You cannot have any liens on your property.
None should consider your loan as "high risk".

Hope this information will prove useful to you.

Regards,
Jason

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