Posted on: 30th Jan, 2009 10:06 am
I got a new home loan and I'm in the process of figuring out how I can pay extra to the principal and cancel off the PMI. I have a conventional 30 year fixed loan. The house price was $200000 and I put 6% (12000) as down payment; so the loan amount is $188000.
How much % of the loan amount should I pay off to drop the PMI? Also, will the depreciating value of the house affect the cancellation of the PMI even if I pay of the required % of the loan amount?
Is the % calculated in regards of $200000 or $188000 (loan amount)?
Does the government have any information (website etc) about the cancelation of the PMI? Any advise would be great!
Thanks
jon
How much % of the loan amount should I pay off to drop the PMI? Also, will the depreciating value of the house affect the cancellation of the PMI even if I pay of the required % of the loan amount?
Is the % calculated in regards of $200000 or $188000 (loan amount)?
Does the government have any information (website etc) about the cancelation of the PMI? Any advise would be great!
Thanks
jon
There are two ways to remove the PMI...
1. Pay down the loan to 80% of the original purchase price. In your case that would be $160,000. Once you do that, you would need to call the bank and potentially fill out a form to get this done.
2. The second scenario is when your home value increases to the point where your current balance of $188,000 is now 80% if the appreciated home value of $235,000. Typically the bank would make you wait at least one year from the purchase date and you would also need to have to pay for an appraisal.
1. Pay down the loan to 80% of the original purchase price. In your case that would be $160,000. Once you do that, you would need to call the bank and potentially fill out a form to get this done.
2. The second scenario is when your home value increases to the point where your current balance of $188,000 is now 80% if the appreciated home value of $235,000. Typically the bank would make you wait at least one year from the purchase date and you would also need to have to pay for an appraisal.