Hello Southern Lakes Members! Welcome back to Mortgage Monday with me, Shelly, your local Mortgage Loan Officer at your local lender, Southern Lakes Credit Union! Today’s topic is: How to remove PMI
When you bought your home, you were probably like most homebuyers and did not have enough saved to put 20% down. In this case, you probably have PMI, private mortgage insurance. PMI can potentially be a significant charge every month. To be eligible to remove your PMI, your loan to value ratio must be 80% or less. Due to the rapid increase in home values, if you bought your home more than two years ago in Southeastern Wisconsin, there is a good chance that your loan to value ratio is lower than 80%.
To calculate your loan to value you must know: 1) what you owe on your home, and, 2) a general idea of what your home is worth. To get an idea of what your home is worth, look at recent comparable home sales in your neighborhood. Take your loan amount and divide it by what you think your home is worth then multiply the answer by 100.
If your loan to value is less than 80, congratulations!! It is time to remove your PMI. Removing your PMI will depend on what type of loan you have. If you have an FHA or USDA loan, the only way to remove your MI is to refinance into a conventional loan. To remove your PMI from a conventional loan, you have two options. The first option is to refinance. The second is to call your lender to ask how to get it removed. In order to remove the PMI without refinancing, your conventional loan your lender will most likely have you pay for an appraisal.
Do you have additional questions regarding PMI? I invite you to call me directly at (262) 694-1600 ext. 604.