How To Remove PMI | Private Mortgage Insurance

How To Remove PMI | Private Mortgage Insurance

Hey y'all Jen Hernandez Lone with Jen so PMI you 
want to know how to remove it whether if it's an   FHA loan or conventional loan there's different 
ways for both and stay tuned we're going to go   over that when we come back okay everybody 
welcome back so private mortgage insurance   hopefully you've watched my video about what is 
mortgage insurance now you have it where you're   going to have it when you buy your house how 
do you get rid of it so first we're going to   do conventional loans and then I'll talk about 
FHA on a conventional loan PMI is waivable in   two different ways the first way is just payment 
like you buy the house for a hundred thousand this   is a super easy example you buy the house for 
a hundred thousand you put five percent down   so you're borrowing ninety five thousand when 
you pay the loan down with hard cold cash to 80   thousand you're at a eighty percent loan to value 
the PMI goes away okay it just disappears now the   second way on a conventional loan that you can 
waive PMI is through appreciation so let's say   the same example you bought it for a hundred 
thousand let's say after a year or so do you   think it's worth 130 I don't know you live in 
just this hugely appreciating area let's just   say you think it's worth 130 now PMI companies 
it's at their discretion but the hard and fast   rule is really after they want 24 payments from 
you two years worth of payments in order to use   appreciation for the calculation of the 80% so if 
two years has passed if you've made quick payments   on time that's the clincher is two payments 
on time that's the purpose of PMI then you can   call your lender who's every year lender of 
record servicer is ask them how to remove   it they're gonna give you a list of local 
appraisers in your area you get an appraisal   the appraisal comes in it let's say 130 the 
80% calculation is taken off of the 130 and   as long as your loan amount is below the 80% 
threshold at that time then PMI will go away   okay now let's hop over to an FHA loan so FHA is 
a little bit different FHA remember from some of   my other videos is super lenient they want their 
money because they were taking a ton of risk by   making a loan to someone that has either lessor 
credit at higher debt or whatever so if you put   three and a half or five percent down PMI is 
for the life of the loan as long as you're in   the loan so the only way to get rid of it is 
to refinance sell refinance pay that loan off   now the other option is if you put 10 or more 
percent down so 10 15 20 50 whatever you have   to make at least 11 years of payments on the 
PMI so after 11 years it'll go away as long   as you're below the 80% which after 11 years 
you should be okay and of course you've been   paying on time so I hope you found this video 
super super helpful we'll talk to you soon Legacy Mutual mortgage is an Equal Housing 
Opportunity lender the opinions expressed   here do not reflect those 
of legacy Mutual mortgage

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