real estate

When to Get Private Mortgage Insurance Dropped

PMI must be cancelled automatically when the loan’s balance reaches 78% of the home’s original value, but you may be able to drop it sooner.

Question: I’ve been paying more than $1,000 every year for private mortgage insurance on my home. When can I ask for the PMI to be dropped? --S.S., Salt Lake City, UtahAnswer:

If you took out your loan after July 29, 1999, your lender must cancel PMI automatically when the loan’s balance reaches 78% of the home’s original value (usually the purchase price), based on your original payment schedule. You may be able to have PMI canceled at a balance of 80% of the original value if you have a good payment history and an appraisal verifies that the property has not declined in value, says Tom Goyda, of Wells Fargo.

 

Some lenders let you cancel PMI based on the property’s current value if you’ve had the loan for at least two years. You may need a balance of 75% of the current appraised value if you closed on the mortgage less than five years ago, says Scott Haymore, of TD Bank. The rules for loans made before 1999 vary by lender and state.

Most Popular

What Biden Will Do: 24 Policy Plays to Expect From the Next Administration
Politics

What Biden Will Do: 24 Policy Plays to Expect From the Next Administration

The Kiplinger Letter forecasts President-Elect Joe Biden’s biggest priorities -- and the likelihood of progress on them.
November 19, 2020
The 13 Best Healthcare Stocks to Buy for 2021
Kiplinger's Investing Outlook

The 13 Best Healthcare Stocks to Buy for 2021

Most of the best healthcare stocks for 2021 will have some sort of ties to COVID, whether it's producing a vaccine or cure, or benefiting from the vir…
November 20, 2020
16 Worst Gifts to Impulse Buy for the Holidays
shopping

16 Worst Gifts to Impulse Buy for the Holidays

Don't let those holiday sale promotions persuade you into buying something now that will be much cheaper later.
November 18, 2020

Recommended

Kiplinger’s Best Firms for Customer Service: Banks, Credit Cards and More
banking

Kiplinger’s Best Firms for Customer Service: Banks, Credit Cards and More

We crunched a lot of numbers (and ran a survey) to crown top firms for their service on banking, credit cards, mortgages, and home and auto insurance.…
October 22, 2020
How to Get Property Insurance in High-Risk Areas
home insurance

How to Get Property Insurance in High-Risk Areas

From wildfires to hurricanes and riots, some homes and businesses are more risky than others to insure. If you’re having a hard time finding coverage,…
September 15, 2020
9 Things You'll Regret Keeping in a Safe Deposit Box
savings

9 Things You'll Regret Keeping in a Safe Deposit Box

Locking up certain important documents and valuables in a bank vault could turn into a headache for you or your heirs.
June 1, 2020
11 Best Things to Keep in a Safe Deposit Box
savings

11 Best Things to Keep in a Safe Deposit Box

Certain documents and valuables, including certain things with sentimental value, should be stored securely at your bank.
June 1, 2020