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Mortgage Broker - Cancel Your Private Mortgage Insurance and Save Congress recently passed a law allowing some homeowners to deduct Private Mortgage Insurance from their Federal Income Tax. Wouldn’t you rather stop paying Private Mortgage Insurance all together? The high cost of Private Mortgage Insurance is wasting dollars that could be paying down your mortgage principle. Here are several tips to help you eliminate the costly, useless insurance. The rules for cancelling Private Mortgage Insurance might be confusing for many homeowners. Conventional, non-FHA mortgages originated after July 29th of 1999 could have Private Mortgage Insurance terminated once the outstanding mortgage balance drops below 80% pertaining to the home’s purchase price. If you forget to request cancellation, the lender is required to automatically cancel your Private Mortgage Insurance at the time the balance reaches 78% of your purchase price. With a traditional, 30 year fixed interest rate mortgage it takes almost 11 years for the to happen. Waiting 11 years to cancel your Private Mortgage Insurance is too long; fortunately, there are loopholes with enough wiggle room to let you through. If your mortgage is sold on the secondary market to either Fannie Mae or Freddie Mac, you may be able to cancel your Private Mortgage Insurance early. Fannie Mae including Freddie Mac have their own criteria for cancelling your Private Mortgage Insurance, called a market test. • 2 Year Mark: You might cancel Private Mortgage Insurance after 2 years if your loan balance is absolutely no more than 75% pertaining to the current market value of your home. • 5 Year Mark: You might cancel Private Mortgage Insurance after 5 years if your loan balance is absolutely no more than 80% of your homes current market value. • You could need to have your home appraised to determine the current market value including there is a particular additional requirement that your payment history must not have any 30-day late payments within the last 12 months, including absolutely no 60-day late payments in the last 24 months. Private Mortgage Insurance premiums might add as much as $200 to your monthly payment amount so it is well worth paying for a particular appraisal to cancel the premiums. You might learn more regarding your mortgage options, including costly mistakes to avoid by registering for a free, six-part mortgage tutorial.
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