How to Get Rid of PMI
This post is primarily for those who are homeowners.
Private mortgage insurance (PMI) is a type of insurance that protects the lender in the event that you default. It was required for your conventional loan if you put down less than 20 percent of the home’s purchase price. Find the exact amount of PMI you pay, monthly, on your statement. If you also pay a HOA fee, determing if you have PMI and how to get rid of it is important to you!
How to remove it
Confirm you have PMI using your monthly statement.
Check out the recent homes sold in your neighborhood.
Call your loan provider's customer service department. Let them know you want to remove PMI.
Based on my experience with Guild Mortgage, determine if you have reached 80% Loan to Value (LTV). To find this amount, take your current loan balance and divide it by your purchase price. For example, your monthly statement says you have a balance of $129,500 and you purchased the property for $145,000. You are at 89% LTV. Since it is not at or below 80%, you would need to have a Broker Price Option (BPO) performed on your home. This is not a formal appriasal, but it is another trusted process of generating property value. The BPO must show that your property has gained a minimum of 20% in equity. So with a purchase price of 145,000, the BPO must show a value of $174,000 or more.
If you have had your home for more than 18 months I highly advise checking on this. It can save you hundreds monthly, depending on your PMI amount.
Reach out to me if you need additional assistance 803-524-0027.