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Step-by-Step Guide to Removing PMI
Step 1: Assess Your Current Equity Position Based On Payment History
- Calculate your Loan-to-Value (LTV) ratio by dividing your outstanding loan balance by the current appraised value of your home.
- Lenders usually require an LTV ratio of 80% or less to cancel PMI.
Step 2: Determine the Actual Value of Your Home
If your payment history hasn’t nudged you below the 80% LTV ratio threshold, don’t fret. Chances are, your home’s value has surged, potentially enabling you to eliminate PMI.
To obtain an approximate home valuation, call me so I can assess your home based on recent sales and comparable properties in your area. If the payments haven’t gotten you below the 80%, and I believe the the home has increased in value based on recent sales, we can get an appraisal to confirm the value.
Step 3: Contact Your Lender
Reach out to your lender to understand the process for PMI removal.
Request a copy of your lender’s PMI removal guidelines and requirements.
Step 4: Schedule a Home Appraisal
Engage a licensed appraiser to conduct a current appraisal of your home.
Ensure the appraiser is well-versed in your local market and can provide an accurate valuation.
Inquire with your lender about preferred appraisers or specific appraisal requirements.
Step 5: Submit Your Request for PMI Removal
Compile all necessary documentation, including the appraisal report and any requested paperwork.
Submit your PMI removal request to your lender, adhering to their guidelines and instructions.
Be prepared to furnish documentation such as recent appraisals or evidence of home improvements if required.
Conclusion
Removing PMI marks a significant financial milestone for homeowners, freeing up additional funds each month and allowing them to fully leverage the equity they’ve accrued in their homes.
By diligently following these steps and proactively managing your mortgage, you can take charge of your finances and unlock the full potential of your home’s value.
Looking for more insider tips on real estate?
Feel free to reach out. I would love to help you wherever you are on your real estate journey.
Kimberly Mee
Real Estate Market Specialist
License #: 3515371
Cell: (561) 817-0033
Know anyone looking to BUY, SELL or RENT a HOME? Call Mee
