Mortgage News

Cancelling Mortgage Insurance

February 20th, 2015

This week, USA TODAY reported many millennials don't enter the housing market because they're intimidated by all the confusing terminology.

From the article:

"After putting away enough savings, the biggest hurdle for Millennial buyers may be the learning curve that comes with understanding the process..."

That's why every week I provide you with definitions and explanations for common mortgage terms.

Here's a great example. People often ask me:

When can I cancel my mortgage insurance (PMI)?

Two answers.

1. PMI cancels automatically when the loan balance reaches 78% of its original value.

2. The borrower can request the PMI cancellation when the loan reaches 80% of the original value of the property (based on amortization schedule) or based on current house value (achieved through appraisal).


Here are the guidelines from MGIC, a national mortgage insurer, on how to cancel PMI.
 

If you have any questions about PMI, how it affects your clients' pre-approval or how to cancel it, please contact me at 757-490-4726 or srubin@tidewaterhomefunding.com.