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PMI Insurance

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Is it time to save some money and cancel your PMI insurance?

Private mortgage insurance, known as PMI, generally is required for home buyers whose down payment is less than 20 percent.

PMI is usually added to the mortgage payment each month to protect the lender should the borrower default. By law, PMI generally must be canceled automatically when the loan balance reaches 78 percent of the home’s original value. However, lenders also may agree to cancel this coverage upon a borrower’s request when the balance declines to 80 percent of the current value, if certain conditions are met.

Borrowers who have made their payments on time each month for five years should contact their lender or loan servicer to obtain all the details on cancelling the coverage.

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