Home values are skyrocketing! If you bought your home in the last 5 years with conventional financing and less than a 20% down payment there is a good chance you are paying PMI (Private Mortgage Insurance) each month. It could be worth checking on your home’s current value to see if you can stop!
It will automatically go away when you reach certain milestones, but with rising home values you may have reached a threshold where you can request removal early.
Instead of waiting for automatic cancellation, if you have owned your home for at least five years you have the right to request cancellation of PMI once your loan balance reaches 80 percent of the home’s original value. If you have owned the home for at least two years, your remaining mortgage balance must be no greater than 75 percent.
Talk to your Realtor for an estimate of your current value. If it looks like your value is high enough it could be worth it to pursue removing PMI.
How do you accomplish this?
- Make the PMI cancellation request to your lender in writing
- Be current on your mortgage payments, with a good payment history
- Meet other lender requirements, such as showing there are no other liens on the home
- Your lender may require an official appraisal to establish value; don’t do this yourself, you lender will order it (typically at your cost of approximately $450-$600) if required and will typically not use an appraisal you ordered, even if was recently completed
You can also remove PMI by refinancing… could also be a good option with today’s low interest rates!
Sharlene Hensrud, RE/MAX Results – shensrud@homesmsp.com
