As you know, one of the main differences between loan programs has to do with mortgage insurance.
Click here to read more about the different types of mortgage insurance. But if you have Borrower-Paid Mortgage Insurance, when can you cancel it to lower your monthly payments?
- A loan is eligible for cancellation at 75% LTV (loan to value) or lower based on a current appraisal if it has been less than 5 years since it originally closed. Or…
- A loan is eligible for cancellation at 80% LTV or lower based on a current appraisal if it has been more than 5 years since it originally closed.
And remember this:
- When the loan balance is 78% of the original loan amount, the mortgage insurance will fall off automatically.
For more information, here are the guidelines from MGIC, a national mortgage insurer, on how to cancel PMI.
If you have any questions, you can reach me at 757-490-4726 or srubin@tidewaterhomefunding.com.
Photo courtesy of Mark Moz (Flickr)