Private Mortgage Insurance

How Do I Remove My Private Mortgage Insurance?

PMI, the acronym for private mortgage insurance, allows an individual(s) to purchase their home with less than a 20% down payment. The question the homeowner must ask themselves is: "Is it time to stop paying monthly into my escrow account for PMI and start putting that money into my pocket???" The most important question is to ask is if the current loan balance is less than 80% of the home's current market value. Since it is difficult to be objective about the value of one's own home, the owner should get an unbiased second opinion. A Realtor who is familiar with the area may be able to help with a valuation through a comparative market analysis. A preliminary consultation with a trained appraiser familiar with your area could also help the homeowner.

There has been a lot of discussion in the press recently regarding consumers that are unnecessarily paying private mortgage insurance. The possible ways one may have achieved enough equity in their home to qualify for a PMI free mortgage are:

• Owner has paid enough to reduce the principal mortgage balance below the 80% Loan-To-Value (LTV)

• The home has appreciated sufficiently enough so that the mortgage balance is 80% or less LTV.

If the homeowner believes that the above criteria have been met, the next step is to contact the current lender requesting information on the requirements to remove the PMI coverage. The most common conditions are, but not limited to, the following:

• A minimum period of time has elapsed since the loan closed. This may vary from as few as 6 months to more than 2 years, depending on the investor.

• The loan is current with no history of late payments.

• A new independent appraisal performed by a lender approved appraiser. The homeowner will be required to pay the appraisal fee that is quoted on an individual basis by the appraisal professional.

Bishop Appraisal Service has experience in appraisals specializing in PMI coverage removal in the Northern Virginia area and one of our professionals would be happy to consult with you. 

BISHOP APPRAISAL SERVICE
Tel (703) 978-1136
Fax (703) 978-2901 

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