Private Mortgage Insurance (PMI)

A current estimate is that there are 146,000 households paying Private Mortgage Insurance in Northeastern Illinois. These household pay about $75/mo on average or close to $1000 per year in PMI. In many cases this is an unnecessary expense since the homeowner may already have enough equity to qualify to end their PMI payments.

To address this on July 29, 1999, the Homeowners Protection Act of 1997 c105:HR.607: ec201 Sec 203 was modified by Congress. It allows the cancellation of private mortgage insurance for those homeowners with a loan to value ratio of 80% under certain circumstances. There are two primary ways to qualify: 1) The loan can be paid down to the point that the original loan amount does not exceed 78% LTV (Loan to Value), or the borrower can show that the value of their home has increased through appreciation showing to a point of at least 20% equity. This is usually accomplished with the help of a new appraisal.

You must have at least 22% equity in your home.

The bill does provide some latitude to lenders in setting their own minimum requirements (including additional stipulations) To meet eligibility requirements, it is advisable to first contact your lender and inform them that you wish to initiate the removal process. Your lender will then forward their eligibility requirements to you. Some lenders will allow you to choose your own appraisal firm.Ê Others will require that the appraisal be assigned by them giving you a limited (or no choice) in the firm's selection. It is important to discover your lenders individual requirements before initiating the appraisal process. This could save you the cost of paying for two appraisals.

Another way to potentially save the cost of a complete appraisal is to use MyPropertyValue.com to see if your property has appreciated to the point that you qualify to terminate your PMI.

The entire bill can be found at Http://thomas.loc.gov/cgi-bin/query/z?

It's easy to get your PMI payments dropped. Just contact us!