NO. The way the law is written, and the way banks do it is as follows: When your loan balance reaches 80% of the original appraised value used to make the loan, the consumer has the right to request the PMI be cancelled. One the loan balance reaches 78% of the original appraised value used to make the loan, the lender is required to cancel the PMI. Keep in mind that the law is clear. Appreciated equity is not a component of the LTV calculations. ~ Bert Carpenter, The LoansA2z team of NOVA Home Loans ~ NMLS 40586 ~ Licensed in California and Arizona ~ www.LoansA2z.com 888-889-9950
No.. But it depends... Bert's answer is correct if you're talking about "Automatic Cancelation"... However, Fannie Mae and Freddie Mac guidelines consider the current appraised value of the property, not the original purchase price/appraised value, in determining whether you can cancel PMI. The loan has to be seasoned, meaning you've made payments for at least two years. You can't have had a 30-days-late payment in the past 12 months or a 60-days-late payment in the last 24 months. (If you have a 2nd mortgage, then the combined LTV could disqualify you) You initiate the request to terminate the PMI policy and are responsible for the cost of an appraisal acceptable to the agency and the lender -- so don't just hire any appraiser. You can terminate PMI if the mortgage loan balance is 75 percent or less of the appraised value after 24 months or 80 percent of the appraised value after five years of making payments. I'm a Broker here in Scottsdale AZ and I only lend in Arizona. If you or someone you know is looking for financing options, feel free to contact me or pass along my information. 480-287-5714 WilliamAcres.com
No, the burden of proof is on you! You need to take a look at your closing paperwork and see if it tells you the procedure to have it removed. At the very least you will have to have an appraisal done, either way contact your lender and find out their required procedure before moving forward.We would be happy to give you the tools and training necessary to help take your business to the next level!We can stop in to your office on Monday at 1:00 PM or 3:00 PM. Please get back to us with a time and we will stop in and get you started! Call or email us.Thanks,Team Best Mortgage Option
Both answers below are correct but you must also keep in mind there is typically a certain period of time the mortgage insurance must remain on the loan (2 - 5 years depending on loan type and the lender who financed your mortgage). You should be able to find out the protocol for your loan type and your lender in the paperwork you initially signed at the closing table. It will clearly state the date the lender will remove the mortgage insurance without you as the borrower doing anything OR you can contact the lender directly to see if you're eligible to have it removed early if you can prove the equity situation. With all that said recent rural development loans will keep mortgage insurance on the property for the life of the loan.
And I just reread your question and you clearly state it's conventional. Sorry for the extra info on RD -
Bert is correct, except it is the lower of the original appraisal OR the purchase price, whichever is lesser. Contact your lender, and request their forms, as soon as you reach 80% amount.
You have to request for it to be removed by the lender.
No Way Jose. Take Ownership. Stay on top of the money your putting out for services you dont need. I know it sounds harsh, but your the boss. Think of it that way and good luck - Andrew
Not automatically. You will need to letthe bank know that you believe you have enough equity in the home to warrantt he removal of the PMI. You will need to have an appraisal done, proabaly by a bank approved appraiser at your cost
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