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MORTGAGEINSURANCE | Private
Mortgage Insurance | PMI
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Insurance for Mortgage
Private Mortgage Insurance (PMI)
protects the lender against a loss if a borrower defaults on the loan.
It is usually required for loans in
which the down payment is less than 20 percent of the sales price or, in
a refinancing, when the amount financed is greater than 80 percent of
the appraised value. |
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Cancellation of Private Mortgage Insurance:
Federal Law May Save You Hundreds of Dollars Each Year
If you put less than 20 percent down on a home mortgage, lenders often
require you to have Private Mortgage Insurance (PMI).
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Private Mortgage Insurance (PMI)
protects the lender if you default on the loan. The Homeowners
Protection Act of 1998 - which became effective in 1999 - establishes
rules for automatic termination and borrower cancellation of PMI on home
mortgages. These protections apply to certain home mortgages
signed on or after July 29, 1999 for the purchase, initial construction,
or refinance of a single-family home. These protections do not apply to
government-insured FHA or VA loans or to loans with lender-paid PMI.
For home mortgages signed on or after July 29, 1999, your
Private Mortgage Insurance (PMI) must - with certain exceptions - be
terminated automatically when you reach 22 percent equity in your home
based on the original property value, if your mortgage payments are
current. Your PMI also can be canceled, when you request - with certain
exceptions - when you reach 20 percent equity in your home based on the
original property value, if your mortgage payments are current.
One exception is if your loan is "high-risk." Another is if you have not
been current on your payments within the year prior to the time for
termination or cancellation. A third is if you have other liens on your
property. For these loans, your PMI may continue. Ask your lender or
mortgage servicer (a company that collects your payments) for more
information about these requirements.
If you signed your mortgage before July 29, 1999, you can ask to have
the Private Mortgage Insurance (PMI) canceled once you exceed 20
percent equity in your home. But federal law does not require your
lender or mortgage servicer to cancel the insurance.
On a $100,000 loan with 10 percent down ($10,000), PMI might cost you
$40 a month. If you can cancel the PMI, you can save $480 a year and
many thousands of dollars over the loan. Check your annual escrow
account statement or call your lender to find out exactly how much
Private Mortgage Insurance (PMI) is costing you each year.
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www.insuranceformortgage.com
owner and contact:
www.vipinfoservices.com This site is about MORTGAGE INSURANCE.
We believe all information to be either in the public domain or have reprint
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are we responsible for any errors or omissions.
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