Discussing whether you should be paying mortgage insurance.
Today I want to introduce you to Mark Smith from Network Funding. He’s a lender that we’ve been working with for years, and he’ll be talking about mortgage insurance and how you can have it removed from your loan. You’re required to have mortgage insurance unless you’re putting 20% down. However, there are three ways to get rid of mortgage insurance on a conventional loan:
1. Once your loan balance reaches 78% of the original purchase price. After this point, mortgage insurance goes away automatically.
2. Your loan balance is at least 80% of the value of your property. If you have at least 20% equity in the property, you can request that your mortgage insurance be removed. Due to high appreciation rates over the last couple of years, this has been a very common way to try to get rid of mortgage insurance. However, some companies won’t allow it or will only allow it with an inspection at your expense.
3. Refinance. When you refinance, as long as you have 20% equity of the appraised value, you can have the mortgage insurance removed.
These are three ways to get rid of mortgage insurance on a conventional loan.
Removing mortgage insurance from an FHA loan is a little different. FHA loans are required to have mortgage insurance no matter what. However, because of high appreciation, folks that had to buy a house with an FHA loan are now refinancing to conventional loans because they have at least 20% equity and can remove the mortgage insurance. This often results in them getting a lower interest rate as well.
Mark can help you eliminate your mortgage insurance in a few other ways, so contact him by phone or email to learn more. If you have any other questions, visit my website or my Facebook page, and don’t hesitate to reach out to me by phone or email. I look forward to hearing from you.
