Private mortgage insurance, or PMI for short, is a type of insurance that is generally required on a mortgage if you make a down-payment of less than 20% of the purchase price of your new home, or borrow more than 80% of the value of your existing home when you refinance. Traditionally, mortgage insurance is a monthly paid premium that’s part of your total mortgage payment. Cancelling your mortgage insurance can save you a ton of money monthly and in the long run. Read on for more information!
FHA and USDA loans have an annual fee that is calculated on your average annual balance and divided into 12 monthly installments. Except for specific older mortgages, and large down-payment FHA mortgages, the annual fees for USDA and FHA loans are for the life of the loan, and cannot be cancelled. However, you can refinance your loan into a new conventional loan that may not require PMI, depending on your loan balance and new appraised value.
If you have a conventional loan, there are some very specific parameters that govern the cancellation of mortgage insurance without refinancing the loan. The requirements are very specific, so here are the guidelines provided by Genworth.
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If you have specific questions about your scenario, call me today at 912-771-2115 to discuss your options.