How To Eliminate PMI

If you put less than 20 percent down on your home when it was purchased, you were likely required to get private mortgage insurance. The good news is that you may be able to have it removed once the loan-to-value ratio on the loan is less than 80 percent. However, the way that PMI gets removed depends largely on when you took out your home loan.

When Did You Take Out the Loan?

For those who had their home loans funded after July 2013, PMI will generally remain regardless of the amount of equity in your home. Therefore, you will need to refinance your current loan, which may mean paying closing costs or other fees. If your loan was funded before July 2013, it can be possible to have PMI removed after paying roughly 22 percent of the original loan balance. It is important to note that for PMI purposes, equity is calculated based on the original loan balance as opposed to the current value of the home. (Learn more on how to get a home loan if your credit score is below 640.)

Removal Is Not Guaranteed

The FHA and your lender will review your request to have a PMI requirement removed from your home loan. If you have any late or missed payments, there is a chance that the PMI will remain on the loan. However, depending on your credit score and other factors, you have the option of refinancing to a new loan that doesn’t have any additional insurance obligation.

Ask a Loan Officer for Help

The best loan officers in Las Vegas are the ones who can answer your questions about PMI such as how much the payment is. They can also work with you to find a loan that either doesn’t require it or makes it easy to remove it at some point in the future.