Private Mortgage Insurance:

If you purchased your home or refinanced your home with a mortgage with less than 20% down payment or equity, you are probably paying PMI (private mortgage insurance). PMI was introduced over 30 years ago to provide lenders with insurance against default for purchasers with a down payment of 20% or less. You are charged a premium for this insurance. This premium is being paid by you with every mortgage payment to insure the lender in case you default on your loan. If you can prove to your lender that you have 20% equity or more in your home, the PMI can be removed from your payment. This can result in a typical savings of $30-150 a month, depending on your mortgage amount.

If your current loan is three years old or more, if you purchased below market value, if market values in your area have increased rapidly, or if you have made improvements that increase the market value of your home, you may have enough equity in your home to have the PMI removed.

To remove PMI you must contact your lender. Your lender should ask for a summary appraisal report done on a Uniform Residential Appraisal Report (URAR) done by a certified real estate appraiser to provide the current market value of your home. We can provide you with the appraisal you need to eliminate your PMI.

Historically, many individuals are not aware that they are paying PMI insurance and continue to pay it even after the loan was paid down to below the 80% of value level. Recently new laws were passed to protect your interest. As a homeowner, you have the right to have the PMI insurance eliminated once the equity in your home reaches 20%. If you need more information or would like to order an appraisal, please contact our office.