Lenders are required to remove PMI (private mortgage
insurance) on conventional loans when the secured property has 20% to 25% equity and
the borrower requests for the removal.In many cases, lenders will allow cancellation of
PMI when the loan to value ratio is less than 75% to 80% of the market value.
It's estimated that more than one million U.S. homeowners are indeed paying up to hundreds
of dollars a month in unnecessary PMI, or "private mortgage
insurance".
Why? PMI is typically required when your down payment is less than 20% of the home's
value. But, what if your home is now more valuable, and you've also added some
equity through your payments themselves? You probably qualify to have the PMI
dropped completely. And a new federal law.
Most lenders require the insurance for homeowners who are unable to put 20% down when they
purchase houses. It's important to note that some lenders require homeowners to pay
for it for a certain period of time before they're eligible to cancel There's a
catch. You have to have a good payment history on the loan, and truly prove that the
equity is over 20% now.
Typical requirements for release of PMI are the following:
That you have made PMI payments for a minimum period of time(at least 2 years)
That your loan balance is below 75% to 80% based on your
payment history, structural improvements, or other conditions
That there is a good payment history
That there is no payment more than 30 days late in the past
12 months
That there is no late payment penalty in the past 12 months
That there is no notice of default recorded against the propertyMost lenders will require a current appraisal performed by State
Certified Appraiser showing the current market value
If you are a home owner in Southern California and have a conventional loan with a
PMI, you possibly have more than 22% equity on your home by now due to the recent property
value appreciation in the area.
A run-up in home values in the last three years may have pushed millions of homeowners
past the 22% equity level they need to drop their payments
If you think you have enough equity on your home now and have a good payment history,
please contact your lender and make a request for your PMI removal. It is most likely that
your lender will require an appraisal to be done on your home by an State Certified
Appraiser.
Assuming you qualify, that means a full appraisal. The free "price checks"
on the web won't cut it.
If you're paying excess PMI, the appraisal fee will pay for itself in a matter of a few
months. Otherwise, you'll pay the PMI for years.
If you have received your lender appraval letter and decided to have an Appraisal on
your own, please contact us via one of the following:
1-Call at: (714) 964-1573 or (714) 235-9687.
2-Fax your lender's letter with your phone number on
it at: (714) 964-1693 so we can call you.
3-Fill out the order fom on the next page and click on
submit botton and drop us an email notifying us of your order.
Thank you and good luck to you
|