Or is it something that won't go away until the house is paid off?
Thanks everyone!
2007-03-15 02:36:49 · 7 answers · asked by Anonymous in Business & Finance ➔ Renting & Real Estate
Yes, the PMI will stop sooner if you send extra money. As soon as your principal balance reaches 80% or less of the sale price of the house or last appraised value, you can call your lender and ask them to cancel PMI. If the loan is less than 12 months old, the lender may require that you maintain PMI for at least 12 months. Don't count on lender to "notice" that you no longer need PMI, call them as soon as you reach that point. Some lenders may start by saying that you need an additional appraisal, but if you actually brought the principal balance down, you shouldn't have to order another appraisal.
2007-03-15 02:50:05 · answer #1 · answered by Alexander K 3 · 0⤊ 0⤋
PMI can usually be discharged once you have 20% equity in the house. The faster you pay down the principal on your mortgage, the sooner you'll reach this 20% mark. Adding extra cash to each payment is a fantastic idea, since all the extra you pay goes directly to principal instead of being split for principal and interest. Another thing that can help is if your house has appreciated in value since you bought it. Any increase in value is considered equity by your lender and can be used in the calculation to discharge your PMI. Talk with your mortgage agent to see what they can do to help you.
2007-03-15 09:48:57 · answer #2 · answered by littleman77y 3 · 0⤊ 0⤋
Seems that most people are close.... The correct answer is %78 Loan to Value (LTV on your PMI rider). Once you are below this amount you can request to be removed.
Caution: New Federal legislation allows lenders the option of forcing PMI for a minimum of 24 months (2 years). Check your contract ("NOTE") and see.. Sometimes even if it states the 24 month clause your lender can choose to change it. If you are at or below your %78 LTV call and ask your lender for a
"Goodwill modification" to your PMI rider.... If you conduct other business with them (savings accounts, auto-loans, credit cards...) they may forego the 2 year waiting period.
2007-03-15 10:16:18 · answer #3 · answered by phantsoft 2 · 0⤊ 0⤋
PMI is stopped when your loan balance is 75%-80% of your home value at the time of purchase. So if you pay an extra $200 towards principle then yes you will stop paying PMI earlier.
2007-03-15 09:45:42 · answer #4 · answered by mailler_mike 3 · 0⤊ 0⤋
By sending in an extra $200 each month you are paying off the house earlier. It's a GREAT way to use extra money. If you have a 30-year fixed mortgage and you make extra payments over the year equal to 1 extra monthly payment, you'll actually pay your mortgage off approx. 13 years early.
2007-03-15 09:43:45 · answer #5 · answered by Oh Boy! 5 · 0⤊ 0⤋
Instead of me telling you what I know why don't you go and see what the folks that make the law say are the facts.
HUD Private Mortgage Insurance (PMI) Information: http://www.hud.gov/offices/hsg/sfh/res/respapmi.cfm
Your answer is in there plus much more that you should know.
Buena Suerte
2007-03-15 11:19:47 · answer #6 · answered by newmexicorealestateforms 6 · 0⤊ 0⤋
when your CLTV is below 80% then you can request that your PMI be cancelled if it not canceled automatically already
so YES sending in extra money will get you LTV down quicker!
you can calculate it by looking at your amortization schedule
good luck
2007-03-15 09:45:49 · answer #7 · answered by EF 2 · 0⤊ 0⤋