Deacon & Hoover Real Estate Advisors LLC
Alex Deacon, Deacon & Hoover Real Estate Advisors LLCPhone: (412) 613-4435
Email: [email protected]

How to get rid of PMI payments

by Alex Deacon 08/16/2024

How to get rid of PMI payments early featured image

For many, owning a home goes from being a dream to reality through the use of a mortgage loan. To qualify for a mortgage loan, many lenders require their borrower’s to already have a down payment of at least 20 percent. 

If the homebuyer has less than a 20 percent down payment available, many lenders will require the homebuyer to pay for private mortgage insurance (PMI). PMI protects their loan investment in the case a borrower defaults on the loan and usually ends once the buyer reaches around 80 percent left of the home value. 


Can PMI be removed early?

There are multiple ways to cancel PMI payments faster than paying your usually monthly mortgage payment. One way is by increasing your monthly mortgage payment so you can reach the 20 percent value mark quicker. 

If the current value of your home has increased since you closed on the property, this may be grounds for your PMI payments to be dropped.


Can you get rid of PMI by reappraisal?

Once you reach 20 percent equity in your home you can request PMI cancellation. Even though this goal can be met with regular, on-time payments - with the growing real estate market, many homes have increased in value. This value increase can help you reach or exceed the 20 percent equity benchmark faster. 

For example, if you purchased a home for $400,000 and put $60,000 down (a 15 percent down payment), you’d have to pay for PMI. However, you find out through research that your home is now worth $440,000, you now have $100,000 of equity in your home. This amount is over the 20 percent mark, giving you grounds for PMI cancellation. 

By doing your research and contacting your mortgage servicer to explore options, you can eliminate monthly payments to PMI insurance and save money.


About the Author
Author

Alex Deacon

Why work with The Alex Deacon Team?

More than six decades of combined team experience
Combined sales over 1,100 in 20 years
The average agent works by themselves or is inexperienced
The average agent is in and out of the business in less than 5 years
The average agent according to national statistics sells less than 8 homes a year
Our team concept allows us to do a large volume of business, keeps our finger on the pulse of the market by doing such volume, giving our clients outstanding service because everyone on the team has a certain skill set and experience level and we all work together to give you the best of each of our individual skills.
Unique programs like our Guaranteed home sale or commission free program just as one example.
We can cover a large area being a team verses one agent.
Huge personal data base of past, present and potential clients that we will expose your home.