mortgage simple definition: The TRUTH behind removing your PMI

The TRUTH behind removing your PMI

The TRUTH behind removing your PMI. Getting Rid of PMI

The TRUTH behind removing your PMI video duration 3 Minute(s) 37 Second(s), published by Mark Fisher on 07 08 2019 - 14:54:58.

This video explains the TRUTH behind getting rid of your PMI insurance on your mortgage
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This video explains the TRUTH behind getting rid of your PMI insurance on your mortgage. PMI can cost hundreds of dollars per month and the faster you can remove your PMI the faster you can lower your mortgage payments and start saving money.

You are watching this video because you already own a home and want to get rid of your pmi or you are looking to purchase a home and want to know how long you will have to pay the extra monthly fee for pmi insurance. In order to know how long it will take of your pmi, we first need to know what type of loan you have, if it’s a single family or multi unit property and if it was originally done as a primary residence or an investment property.

For those of you who have an FHA loan the pmi will never go away if you put less than 10% down and it will take 11 years to go away if you put 10% down or more. With a conventional loan your PMI can be removed once you meet certain conditions. Most people think that your pmi goes away once your reach 20% equity based on your homes current market value, which is a common misconception.

For a single family property your pmi should automatically go away once you hit a 78% loan to value based on the original purchase price and all of your mortgage payments are current and up to date. On average this generally takes about 7-8 years to get to this 78% loan to value. You can request to have your loan servicer remove your pmi once you reach an 80% loan to value based on the CURRENT MARKET VALUE as long as its been 5 or more years since you purchased the property or after two years and you can document that substantial property improvements have been made. You would need to do an appraisal through your loan servicer in order to verify the current market value. If you own a 2-4 family home that you purchased as a primary residence or a 1-4 family as an investment, you will need to figure out if you have a Fannie Mae or Freddie Mac mortgage. You can check using this link:
https://www.makinghomeaffordable.gov/get-answers/Pages/get-answers-find-out-mortgage.aspx

If your loan is owed by Fannie Mae your pmi will automatically terminate once you hit the midpoint of the mortgage loan amortization period. So if you did a 30 year loan that would be once you completed the 15th year. You can request to have the pmi removed once your loan balance is at 70% of the current property value. If your loan is owned by Freddie Mac the pmi is not eligible for automatic termination and you will need to wait until you reach a loan balance of 65% or less of the current property value to request for it be to removed.

Knowing the truth behind removing your PMI can sound pretty discouraging, but the good news is that you still have another option to get rid of your pmi and that would be to do a refinance. As long as your have 20% equity based on the current property value, you can refinance your mortgage and eliminate your pmi at anytime. Keep in mind you do have to qualify for this new loan based on your current income, credit and assets. Also, when you refinance there are typically closing costs involved so you will want to do a break even analysis to see if it makes sense for you to do so based on how long you plan on keeping the property and when you will reach your break even point.
If you would like a free consultation to see if refinancing makes sense for you and your situation use this link:
https://7259785825.mortgage-application.net/FreeConsult.aspx