• Blog Post: How to Remove Mortgage Insurance and Save on Your Monthly Payments

  Introduction: When you bought your home, did you have to get mortgage insurance? Are you looking for ways to reduce your payments by getting rid of your mortgage insurance? Or are you a real estate agent looking for more knowledge on getting rid of mortgage insurance to better assist your clients? Then you won’t want to miss our topic today as we discuss various strategies to remove mortgage insurance and save money on your monthly payments!

  1. Reach 20% Equity:

  Automatic Cancellation: Once you reach 22% equity in your home (based on the original purchase price), your lender is required to automatically cancel PMI (Private Mortgage Insurance).

  Request Cancellation: When you reach 20% equity, you can proactively contact your lender to request PMI cancellation. This may require an appraisal to confirm your home’s current value.

  2. Refinance Your Mortgage:

  Refinance to a New Loan: If your home has appreciated in value or you’ve paid down a significant portion of your mortgage, refinancing into a new loan without PMI can be an effective option.

  Considerations: Make sure the savings from removing PMI outweigh the costs of refinancing, such as closing costs and new loan terms.

  3. Get a New Appraisal:

  Current Market Value: If your home has appreciated since you purchased it, getting a new appraisal can help prove you have reached the necessary equity to remove PMI.

  Process: Contact your lender to discuss their requirements for accepting a new appraisal and proceed with hiring a certified appraiser.

  4. Pay Down Your Loan Balance:

  Lump-Sum Payments: Making additional payments toward your principal can help you reach the 20% equity threshold faster.

  Biweekly Payments: Switching to biweekly mortgage payments instead of monthly can also help you build equity more quickly.

  5. Home Improvements:

  Increase Home Value: Investing in home improvements that increase the value of your property can help you reach the required equity faster.

  Documented Improvements: Keep records and receipts of improvements to support your case when requesting PMI removal.

  6. Wait for Automatic Termination:

  Scheduled Termination: By law, PMI must be automatically terminated once you reach the midpoint of the loan term (e.g., 15 years on a 30-year mortgage), as long as you are current on your payments.

  Steps to Request PMI Removal:

  1. Check Your Loan Documents: Review your original loan documents to understand the terms and conditions related to PMI.
  2. Monitor Your Equity: Keep track of your mortgage payments and home value to know when you reach the 20% equity threshold.
  3. Contact Your Lender: Once you believe you have reached the necessary equity, contact your lender to discuss the PMI removal process and any required documentation or appraisals.
  4. Submit a Written Request: If needed, submit a formal written request to your lender for PMI cancellation, including any supporting documents such as a new appraisal or proof of additional payments.

  Conclusion: Removing mortgage insurance can be a straightforward process if you are proactive and informed about your options and the requirements set by your lender. By following these steps, you can potentially save a significant amount on your monthly payments.

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  By following these strategies and steps, homeowners can take control of their mortgage payments and potentially save a substantial amount over the life of their loan. Stay informed, stay proactive, and take advantage of the opportunities to reduce your financial burden.

  Contact Morgan Financial

  If you live in Florida and want honest and helpful professional advice, please reach out to us at Morgan Financial. We are here to assist you in making the right choice and guiding you through the process of removing mortgage insurance.

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  Please contact us today for more detailed information or have any specific questions. We’re here to assist you in making your home buying dreams a reality!

If you live in Florida and want honest and helpful professional advice, please reach out to Morgan Financial in Melbourne, Brevard County. Our team is here to assist you in making the right choice for your homebuying journey. Whether you’re a first-time homebuyer or a real estate agent looking to expand your knowledge, we are here to help.

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For more information and personalized assistance, contact Morgan Financial today. Let us help you turn your homeownership dreams into reality!

Talk with a Mortgage Expert!

Ready to explore how the this information affects your home-owning journey? Contact us today for expert guidance. Your property journey begins with confidence, backed by the local expertise of Morgan Financial. Call 321-757-7530