|
Q: I am trying to get the PMI taken off of my mortgage and I don´t know how to go about doing it. Help.
- Clint, Costa Mesa
A: PMI (property mortgage insurance) is placed on a mortgage to protect the lender against default when less than 20 percent is used as a down payment by the buyer at the time the loan is originated.
This is usually done in the form of a higher interest rate, typically between $25 and $65 a month per each $100,000 you borrow.
If the value of your home has appreciated and your loan-tovalue ratio is now at least 80 percent of your homes worth you can apply to have your PMI removed permanently from your mortgage payment.
Contact your lender and let them know that the value of your home in has increased enough to warrant the change.
The lender will request that an appraisal be made - paid for by you. Once the appraiser has determined that the equity of your property is above 20 percent, the bank will look at the appraisal and make a determination as to removing the PMI portion from your monthly payment.
As of July 1999, the Federal Private Mortgage Insurance Act provided that when you hit 22 percent the lender must automatically cancel PMI.
Often times, in this day and age with voice mail, it is difficult to get through to the "right" person at an institution, be persistent. The money you are entitled to save will be worth it over the life of your loan.
Valerie Torelli is owner of Torelli Realty
in Costa Mesa. Direct your questions to
asktherealtor@torellirealty.com or call
714-540-7355 |
