Enjoy Magazine - January 2019 January 2019 Issue | страница 13

You have the right to request PMI cancellation when your loan to value reaches
80 percent of the sales price you paid, according to the Consumer Financial
Protection Bureau. In the closing packet you will find your PMI disclosure
document. It will state the date when your mortgage is scheduled to reach
80 percent LTV, but you can make this request sooner if you’ve been making
additional mortgage payments.
The CFPB says:
• You must put your cancellation request in writing.
• You must have a good payment history and be current on your
payments.
• You cannot have a second mortgage or “junior liens.”
• You may be asked to provide a professional appraisal proving the value
of your house has appreciated rather than declined.
2. AUTOMATIC TERMINATION
Your mortgage servicer must automatically terminate PMI when your principal
balance is scheduled to reach 78 percent of your original home value. You have to
be current on your payments or PMI will stay until your payments are brought up
to date.
3. FINAL TERMINATION
There are some homeowners who are underwater on their mortgage, meaning
they owe more than their home is worth. They purchased with less than 20
percent down or opted for an interest only loan or they’ve requested forbearance.
And even though they have made payments over the years, their loan to value
has not reached 80 percent. Yet, the servicer is required by law to remove PMI at
the midpoint of the loan amortization schedule. On a 30-year loan, the midpoint
is 15 years.
4. REFINANCE
Another way to remove PMI is to refinance into a new mortgage if your house
has appreciated. Of course, there are pros and cons. Refinancing might mean
giving up a super low interest rate. On the other hand, interest payments are tax
deductible on mortgages up to $750,000 regardless of income. With PMI, its tax
deductibility is always a question mark and is prohibited if you make more than
$109,000, according to H&R Block. Refinancing might allow you to pay off other
debt or renovate your house while removing pesky PMI. To explore refinancing
options, ask your Guaranteed Rate loan officer to help.
1. REQUEST CANCELLATION