How to Cancel Your Mortgage Insurance and Reduce Your Monthly Mortgage Payment!
Did you know that when you have paid down your mortgage loan balance, or your property value has increased, you may be eligible to eliminate your monthly mortgage insurance?
Step One: Know Your Rights – The Homeowners Protection Act mandates that a homeowner can request the elimination of mortgage insurance when the unpaid principal balance of your loan reaches 80% based on the original value of your home.
Important to Know: If you live in an area that has seen appreciation in home values or you purchased a home under market or fixed one up, you can request early termination based on the current value of your property.
Step Two: Contact Your Servicing Company – This is the Company You Make Payments to.
Step Three: Ask for a “MI Termination Request”.
Step Four: Discuss your options with your servicer. For instance, if you have not paid down your loan balance to 80% of the value or below, then you will need to request cancellation based on the current value of your home.
Requesting MI Termination Based on Current Value of Home
- In many cases, your servicer has access to a system that will tell them the current value of your home. If this value shows that your loan to value is 80% or less, the servicer can terminate your mortgage insurance, and this should not cost you anything.
- If the system does not show that your value has increased, you always have the option to pay for an appraisal of your property. However, you will be responsible for paying for that appraisal whether or not the value is sufficient enough to terminate mortgage insurance.
