Posted on: 28th Oct, 2006 03:51 pm
can the lender charge me for cancellation of the PMI. I approached them and they sent me a letter telling that I will have to pay around $200 for broker\'s price opinion.
Hi,
If you want the Private Mortgage Insurance cancelled before the loan is two years old then you will have to pay for a complete appraisal. It is used to determine the present market valuation of the home. Normally an appraisal would be for about $350 or higher.
And from what you have said the lender is asking for seems quiet reasonable to me.
If you want the Private Mortgage Insurance cancelled before the loan is two years old then you will have to pay for a complete appraisal. It is used to determine the present market valuation of the home. Normally an appraisal would be for about $350 or higher.
And from what you have said the lender is asking for seems quiet reasonable to me.
Hi,
As per Homeowner's Protection Act of 1998 the PMI is automatically terminated when the equity reaches 22 percent or the borrower request for the cancellation after the equity is 20 percent.
This rule is applicable for mortgages signed on or after July 29, 1999. Your loan must have been older than this date and that is the reason it was not automatically terminated.
If the loan is older than the mentioned date then the borrower has to ask the lender for cancellation after his home's equity is more than 20 percent.
You can read more about cancellation of PMI from this FTC page: http://www.ftc.gov/bcp/conline/pubs/alerts/pmialrt.htm
Thanks
Colin
As per Homeowner's Protection Act of 1998 the PMI is automatically terminated when the equity reaches 22 percent or the borrower request for the cancellation after the equity is 20 percent.
This rule is applicable for mortgages signed on or after July 29, 1999. Your loan must have been older than this date and that is the reason it was not automatically terminated.
If the loan is older than the mentioned date then the borrower has to ask the lender for cancellation after his home's equity is more than 20 percent.
You can read more about cancellation of PMI from this FTC page: http://www.ftc.gov/bcp/conline/pubs/alerts/pmialrt.htm
Thanks
Colin
hi guest,
if you cancel the pmi policy when you are not supposed to, then only you will have to pay high charges. for instance, if your have taken a home loan on or after the 29th of july, 1999 and the program you have qualified for is not government insured fha or va loan, then you can cancel the pmi when you build up 20%-22% equity through regular mortgage payments and you may not have to pay a fee. also, you can cancel the insurance on the loan provided that it is taken for purchase, initial construction or refinance of a single-family home.
thanks,
sara.
if you cancel the pmi policy when you are not supposed to, then only you will have to pay high charges. for instance, if your have taken a home loan on or after the 29th of july, 1999 and the program you have qualified for is not government insured fha or va loan, then you can cancel the pmi when you build up 20%-22% equity through regular mortgage payments and you may not have to pay a fee. also, you can cancel the insurance on the loan provided that it is taken for purchase, initial construction or refinance of a single-family home.
thanks,
sara.