What is PMI Insurance?
PMI, the acronym for Private Mortgage Insurance, which allows individuals to purchase their home with less than a 20% down payment. If you purchased your home with conventional financing and put less than 20% down, it’s likely you’re paying PMI.
Private mortgage insurance protects the lender or investor against loss if a borrower stops making payments. Often, homeowners mistakenly continue paying this insurance years after it’s no longer needed. The result? They waste thousands of dollars in useless insurance premiums.
How to Get Rid of PMI For Good
Here’s the good news that many homeowners don’t realize. In many cases, once you’ve reached 20% equity in your home by appreciation, improvements made to the home or by paying down the principal balance (or any combination of the three), you can compel the lender to cancel the private mortgage insurance.
To cancel your PMI, contact the lender or servicer to obtain their specific requirements for cancellation. Most of the time, all that’s needed is to make the request in writing for the private mortgage insurance to be canceled and to provide the lender with proof of sufficient equity over 20%. In most cases, the necessary proof is an appraisal completed by a state certified appraiser.
Keep in mind, it’s the servicer’s ultimate decision and they’ll take many factors into consideration including the payment history over the life of the loan before allowing you to drop this insurance. It’s in their best interest to make sure you keep paying the insurance. However, there will come a time when this added monthly expense will no longer benefit you. That’s why you should protect yourself from being taken advantage of by monitoring your equity position. Remember, no one is going to cancel the PMI for you. It’s your own responsibility.
Most lenders require a real estate appraisal by a state certified appraiser as the primary proof required to eliminate unnecessary PMI insurance. At the Anderson Appraisal Services, we specialize in helping people just like you eliminate unnecessary PMI insurance when feasible.
Our clients include some of the nation’s largest lenders and the most respected banks and credit unions
Why Choose Anderson Appraisal Services
Experience and knowledge of your market is one of the most important criteria when selecting an appraisal firm. As one of the oldest and biggest firms in San Diego County, Anderson Appraisal Services has earned a strong reputation as one of the most qualified appraisal service firms.
Years of Experience
PMI Removal Report Recommendations
Using our proprietary valuation technology platform, we create accurate, well-developed appraisals available in formats tailored to complement the PMI removal process. As an industry leader, we take pride in providing the highest quality appraisals using innovative technology and our market-specialized appraisers.
The most cost-effective way of obtaining a preliminary value to get an idea of your current equity position. You can periodically order an AVR or we can monitor your value and alert you when you have reach an 80% loan-to-value ratio (LTV).
An affordable way to get the assistance of an appraiser to determine your equity position. Utilizing this report option can save you the expense of a full appraisal if you’re close to the equity threshold.
The standard appraisal form required by lenders for supporting the opinion of value and your assertion that your equity position warrants the removal of PMI insurance.
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