PMI REMOVAL

Private Mortgage Insurance or PMI is a supplemental insurance that many lenders ask home buyers to purchase when the amount being loaned is more than 80% of the value of the home. Quite often, this additional payment is folded into the monthly mortgage payment and is quickly forgotten. This is unfortunate because PMI becomes unnecessary when the remaining balance of the loan - whether through market appreciation or principal paydown - dips below this 80% level. In fact, the United States Congress passed a law in 1998 (the Homeowners Protection Act of 1998) that requires lenders to remove the PMI payments when the loan-to-value ratio conditions have been met.

However, very few lending institutions will take the time to periodically review their property profile to determine when your home’s value has bridges that PMI gap. The homeowner could be paying costly insurance premiums which are unnecessary. It becomes the homeowners responsibility to remain aware as to what has been paid down on their mortgage or if market findings show the area home values to have increased.

We at Hawk Appraisals can offer home owners that believe they have met the 80% loan-to-value, the proof regarding your home’s value. The next step is to file a PMI Release with your mortgage company. This will reduce your monthly mortgage payment by the removal of this additional insurance policy which would no longer be needed. The cost of the appraisal is often recovered in just a few months of not paying the costly PMI.