When Can I Cancel My Fha Mortgage Insurance?

[armsli]

In the ten years I have owned my home I've put a lot of sweat equity into it with remodeling and home improvements. I was looking forward to attempting to cancel PMI, but according to Ditech the loan balance much reach 78% of the ORIGINAL value of the house. Is this correct? Before BOA sold to Ditech they told me I could approve an appraisal to determine the value of the home in order to attempt canceling PMI.

Any clarification would be appreciated.
Lisa

 

[Moe Bedard]

Hello Lisa,

The annual Mortgage Insurance Premium will be paid monthly for the life of the loan, or until you reach a 78% loan-to-value of your original mortgage balance and have paid the insurance premium for at least 60 months.

Here is what the Consumer Financial Protection Bureau says:

Request PMI cancellation

The Homeowners Protection Act gives you the right to request that your lender cancel PMI when you have reached the date when the principal balance of your mortgage is scheduled to fall to 80 percent of the original value of your home. This date should have been given to you in writing on a PMI disclosure form when you received your mortgage. If you can't find the disclosure form, contact your lender.

You can also make this request earlier if you have made additional payments to reduce the principal balance of your mortgage to 80 percent of the original value of your home.

There are other important criteria you must meet if you want to cancel PMI on your loan:

• Your request must be in writing.
• You must have a good payment history and be current on your payments.
• Your lender may require you to certify that there are no junior liens (such as a second mortgage) on your home.
• Your lender can also require you to provide evidence (for example, an appraisal) that the value of your property hasn’t declined below the value of the home when you first bought it. If the value of your home has decreased, you may not be able to cancel PMI.

If you meet these requirements your servicer generally must cancel your PMI when you request it.

http://www.consumerfinance.gov/askcfpb/202/when-can-i-remove-private-mortgage-pmi-insurance-from-my-loan.html

 

[armsli]

Thank you so much for your reply. Bummer

Lisa

 

[Moe Bedard]

You are welcome and best of luck!

 

[Erik Sandstrom]

I would like to add to this, when did you get your FHA loan? There has been a change in FHA loans where the mortgage insurance is required for the life of the loan. If you got your loan prior to June 3rd, 2013 you can eliminate the MI once you have done what Moe has mentioned above. If your loan was originated after that date and you have a 30 year fixed, the MI will remain on the loan for the entire term.