Buying a house can be difficult at times, but if you bought your house with a down payment of less than 20%, you were required to purchase mortgage insurance. The same goes if you refinanced with less than 20% equity. PMI or private mortgage insurance premiums can be expensive and if you’re looking to save some money, I’m sure you’re thinking, “Can Mortgage Insurance Be Cancelled?”
To cancel your private mortgage insurance, you must have at least 20% equity in the home and you must have paid down your mortgage balance to 80% of the home’s original appraised value. If this option does not work for you, there are a few more options that you can look into.
You can get a new appraisal on your house. It could cost between $300 to $500 to get your house appraised but some lenders would consider a new appraisal instead of the sales price when deciding whether you meet the 20% equity threshold. You could remodel your house by adding a room to increase your home’s value, then ask the lender to recalculate you loan-to-value ratio using the new value. You could start to prepay on your loan to speed up the process of meeting the threshold. Even an extra $40 to $50 a month on your mortgage can drop your loan balance drastically over time.
A few other points you need to know before cancelling your mortgage insurance, the PMI cancellation request must be in writing; you must have a good payment history; you might have to prove you don’t have a home equity loan or a home equity line of credit.
If you have considered all of the above and are still wondering “Can Mortgage Insurance Be Cancelled?”, you should consider refinancing. If your home value has increased enough, the new lender won’t require mortgage insurance. If refinancing is the right route for you or if you are still unsure of the question “Can Mortgage Insurance Be Cancelled?”, give us here at Team Jardine Mortgage Brokers a call at (506) 471-4210 or toll-free at 1-866-957-2263. We will be pleased to answer any questions you have.