I you purchased your home with less than a 20% down payment then you probably are paying for private mortgage insurance every month.
Private mortgage insurance was introduced to protect the lender in case the borrower defaults.
The premium is included in the borrower's monthly mortgage bill and varies depending on the type and size of the loan, the down payment amount and the credit of the borrower.
But with proper planning you can get rid of private mortgage insurance and reduce your monthly bank payments.
Usually after 2 to 5 years from the initial purchase date a borrower can request to have the loan servicer cancel mortgage insurance if the homeowner has accumulated at least 20% in equity based on the home's current market value.
Having an appraisal that shows your home’s current market value is at least 20% greater than your outstanding mortgage is one of the most powerful pieces of evidence you can present as cause for PMI removal.
That being said, a lender can still reject a request for a number of reasons, depending on which investors own your loan, and as such we recommend always talking with your lender prior to ordering an appraisal
Note: borrowers with FHA loans are usually not eligible for PMI removal unless they apply for a refinance.
If you’re a homeowner in the District of Columbia and would like to order a residential home appraisal click
here.
