PMI Removal-Another Way To Reduce Your Mortgage Payment

Most people would like their mortgage payment to be as low as possible.  One way to do this is by cancelling your private mortgage insurance on your home loan, if you have it.  Private mortgage insurance makes it possible for home buyers to get into a home with very little money down, as little as 3% of the homes value.  This can make a big difference for a lot of buyers that are tight on funds.  The private mortgage insurance (PMI) does not have to be kept for the life of the loan.  In fact, it is only required until you have built up 20% equity into your home.  After this is achieved you can request that it be removed. Records indicate that approximately 90% of homeowners having PMI remove it within 60 months after getting their loan.

Removal of PMI is a rather straight forward process.  Here are the steps:

1. Try to determine if you have built the 20% equity into your home. This could have been achieved through appreciation of property values in the area, making larger that required mortgage payments each month (resulting in the mortgage being paid down), or through renovations or improvements that have increased the value of your home. If you answered yes to any of these scenarios you could be a good candidate.
2. Contact your loan servicer and provide them with your name, social security number, address, and loan number.
3. Ask them what their requirements are for PMI removal. They may need additional information including an appraisal to verify that their criteria have been met.
4. If they need an appraisal find out if they have to order it or if you can. If you are able to order it you can call around to screen the appraiser based on their cost, experience, and knowledge of the area.
5. Send a request in writing for PMI to be cancelled.
6. After the appraisal is finished the servicer will follow up with you about the status.

Most people may only think about refinancing their home to lower their payment but if you do a little homework you can achieve the same goal of lowering your payment without all the closing costs.