You might want to take a closer look at your mortgage statement. Some people are unknowingly paying between $50 to $400 monthly for insurance that doesn’t even benefit you!
It may be a good time to look at your mortgage statement to see if you are still paying PMI (private mortgage insurance). If you’re feeling as though you have at least 20% in equity in your home, you should apply for an elimination of PMI from your lender or mortgage servicing company.
To remove PMI, or private mortgage insurance, you must have at least 20% equity in the home. You may ask the lender to cancel PMI when you have paid down the mortgage balance to 80% of the home’s original appraised value. When the balance drops to 78%, the mortgage service is required to eliminate PMI
With home values recovering, as surveyed in over 100 metro areas the fourth quarter of 2016 yielded no changes in the top 10 “most recovered” but –the top 10 had moved past previous “boom time” peaks for home prices.
We find a fair amount of people who continue to pay PMI for no reason other than not knowing. The money is not recoverable nor does it provide you any insurance as it insures the lender against default.
When this occurs don’t expect your mortgage servicing company to notify you that you are in a position to remove PMI. You need to make the call yourself.
If prices have gone up in your area since you purchased your home, you can have your home appraised. If the amount remaining on your mortgage x 1.25 is less than the new appraised value of your home, you can request that the PMI be canceled.
Going through the necessary steps will put money back in your pocket monthly. On some occasions, it may make sense to refinance the mortgage all together, especially if you can lock in a lower rate!
By: Amelia Sapowsky, Director of Business Development