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| PMI Removal Homes have significantly appreciated over the last couple years. You may now have enough equity in your home to drop PMI (Private Mortgage Insurance). Find out below how you can save significant money each month off your mortgage payment. What Is PMI Insurance? Private Mortgage Insurance or PMI as it is more commonly known, is an insurance premium that was taken out by your lender that protects them in the event you default on the loan. The remainder on the mortgage note would be covered and the loan would be paid in full. This premium is added to your monthly mortgage payment and is paid until you have an appraisal that indicates you have 20% (in some cases more) equity in your home. What Is Equity? Equity is the difference between the value of your home and the mortgage balance. (I.e., If your home is worth $100,000 and your mortgage balance is $80,000, then your equity is $20,000 or 20%) How Do I Know If I Have PMI Insurance? If you put down less than 20% when you purchased your home, you probably have PMI insurance. Your monthly mortgage payment should breakdown your payment, principle, interest, PMI, etc. However, if it does not, contact your lender to see if PMI is included. It may be hidden in your monthly escrows. How Do I Drop My PMI Insurance? The first thing you should do is to call your lender to find out their specific guidelines for PMI removal. They generally like to see a good payment history and a minimum of 20% equity. In some cases, with less than 2 years of ownership, they may require 25% minimum equity. However, they may only require 20% if the increase in equity is the result of significant improvements to the home. It is best to check with your lender before going any further. In most cases, your lender will require you to hire a State Certified Real Estate Appraiser to perform an appraisal on your property. You then mail the appraisal and any other lender paperwork requesting the removal of PMI to your lender. It typically takes a few weeks for them to process the paperwork and to reduce your monthly mortgage payment. It's truly a simple process. How Do I Know If I Have At Least 20% Equity In My Home? McClintick Real Estate, Inc. will gladly consult with you over the phone. With information you supply us about your home, we can advise you whether or not to have a full appraisal done on your property. This initial consultation is FREE! What Next? Give us a call today for a FREE consultation or simply order an appraisal online with our Appraisal Request Form. Please fill out as much information as possible. We will call you to confirm the appraisal request and to get any additional information that may be needed. Remember, we only charge for a full appraisal on your property.
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