If you bought a home with less than a 20% down payment you are most likely paying PMI which is short for Private Mortgage Insurance. PMI is an added expense on the majority of conventional homes loans above and beyond the monthly principal and interest payment. If you bought your home with a 5% down payment conventional loan it will typically take between 7 and 8 years for you to pay down your mortgage for you to have enough equity to have your monthly PMI payment removed.
For most people who are paying PMI, there may be another way to get your monthly PMI payment removed. The housing market and home values haved increased substantially over the last couple of years and there are a lot of people paying PMI who haven't considered that they may already have more than 20% equity due to their increased home value. Remember, your house doesn't have to have increased by 20% because you likely put down at least 5% as a down payment so the equity may already be there. For many, this could mean you could qualify to have the monthly private mortgage insurance removed from your loan.
You will likely need somewhere between 20% and 22% equity or an 80% loan to value to 78% loan to value (more common) to qualify to remove your PMI. Your lender will likely need some sort of documentation confirming that you do have adequate equity in order for them to remove the PMI so be prepared to have home appraised. Have you made substantial home improvements since purchasing such as remodeling your kitchen, bath, installing a deck, patio, porch, sunroom, finishing the basement? These types of improvements can also increase the value of your home making it even easier to qualify to have your monthly PMI removed. Your lender will likely have a guidelines for removing PMI so it is a good idea to reach out to them and ask what will be required especially if you believe you have roughly 20 to 22% equity. By doing this you may be able to reduce your current monthly house payment and save every month for the life of your loan.
The Sam Miller Team of REMAX Stars Realty
740-397-7800 SamMillerSells.com
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