Cancel Mortgage Insurance (PMI) in 2 steps

PMI Basics for Consumers

Private mortgage insurance (PMI) protects the lender or investor against loss, not the home owner. If you pay 5% down, the PMI company will insure, or guarantee, the top 10% of the loan. If you go into default, they will reimburse the lender.

* Typically PMI is required for a sale if there is less than a 20% down payment.
* Not all lenders require PMI, even for low down payment loans.
* PMI protects the lender, not the consumer.
* PMI costs vary but are usually 0.5% of the loan amount for the first year of the loan, with lower payments in later years.
* PMI is collected by the loan servicer, and sent to the PMI company.
* PMI removal is based on both the payment history and the value of the collateral (house).
* Early cancellation PMI removal requirements vary considerably among lenders.
* There are only four companies that offer PMI.

How to get PMI removed

Most, but not all, lenders will remove their PMI requirements if: (Consumer PMI Removal Information)

1. The loan to value ratio on your loan is 80% or less. (Some require 75% or another LTV).
2. You have made your payments on time for two years.

Step 1 - contact your lender

Your first step is to contact your lender (the company you send your payments to). Contact information should be on your payment stub or invoice. Lender requirements vary widely on LTV, etc.

Step 2 - get an appraisal

Your lender will tell you which appraiser you can use. Sometimes you can select your own appraiser. Sometimes the lender chooses the appraiser. Note: you do not need an appraisal if you have paid off at least 20% of your original loan amount.
If you can select your own appraiser and are located in Los Angeles, Orange, Ventura, San Bernardino or Ventura Counties, we can help you.

Rick Sarouk specializes in helping folks just like you rid themselves of unneeded and unwanted PMI insurance. We offer a free initial consultation and will help you to determine for your self at no charge or obligation if you have sufficient equity in your home to enable you to have your PMI mortgage insurance cancelled.

Mortgage Insurance Companies of America (MICA) has a PMI calculator and other useful information.