Welcome to Joe Knows Mortgages MINUTE, where we answer your mortgage questions.
On this week’s Joe Knows Mortgages MINUTE, we answer the question:
How do you cancel your mortgage insurance?
As discussed in our previous “Joe Knows Mortgages MINUTE”, you are required to pay mortgage insurance on a loan if you put less than 20% towards your down payment on a conforming loan.
With a conforming loan, you may qualify to cancel your mortgage insurance. To cancel your mortgage insurance, you must have at least 20% equity in your home. Once your loan has been reduced to 80% of the home’s original appraised value, you may contact your mortgage lender to discuss cancelling your mortgage insurance.
Typically, there are three different scenarios where you should be able to have your mortgage insurance cancelled:
1) Once you reach 80% loan to value based on the initial amortization schedule, you can petition with the servicer of your loan to remove the mortgage insurance.
2) If your property value has appreciated, and you have 25% equity in the property, you also may be eligible given certain circumstances.
3) Once the loan to value reaches 78%, of originally value, based solely on the initial amortization schedule, the lender must automatically cancel the mortgage insurance.
While further restrictions and requirements exist, we have added links to the major mortgage insurance companies on the actual blog for exact information from the mortgage insurer that insures your loan.
For more on Mortgage Insurance, click HERE
MGIC mortgage insurance canceling
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