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Real estate Q&A: How to do away with private mortgage insurance
Real estate Q&A: How to do away with private mortgage insurance
  FORT LAUDERDALE, Fla. – Jan. 13, 2014 – Question: We bought our home in 2005 with a no-downpayment loan that required private mortgage insurance. Since then, we have worked hard to make additional principal payments and have reduced our balance to about 70 percent of the current value. The loan papers say that we can have the PMI eliminated when the loan balance is less than 78 percent of the value of the home. Based on the original amortization schedule, that wasn’t supposed to happen until 2018. Our lender is saying that the PMI must be paid until then. Can we do anything about this? – David
Answer: Yes. Typically, a lender guards itself against a default by requiring the borrower to take out private mortgage insurance if the downpayment is less than 20 percent. The Homeowners Protection Act is the federal law that applies to your situation. It states that your PMI payments will stop on the date disclosed to you when you made the loan – 2018. Because you made extra payments, you can apply to have the PMI removed. But you must be current on the loan ... more

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