cancelling mortgage insurance
Here is some very basic answers to questions you may have for cancelling Mortgage Insurance:
You must contact your mortgage servicer to request cancellation or inquire how much longer mortgage insurance will remain on your loan.
Your rights as a Homeowner
The Homeowners Protection Act requires that mortgage insurance be cancelled when you build up a certain amount of equity in your home. This federal law applies to most types of mortgages.
When can MI be cancelled?
Individual investors establish the criteria for cancelling mortgage insurance based on a property's current value. HPA does not address mortgage insurance cancellation using current value.
When the balance on your mortgage reaches 80% of the home's original value or current appraised value, you may request cancellation of your MI. You must have a good payment history with respect to the mortgage, mortgage payments must be current and there can be no other loans against the home. Some lenders also require verification that the property did not decrease in value.
Fannie Mae and Freddie Mac typically require that the loan be seasoned at least 2 years AND
Will Mortgage Insurance get cancelled automatically?
When the principal mortgage balance reaches 78% of the home's original value and payments are current, the lender is required to cancel the mortgage insurance automatically.
Is there a refund?
You may be eligible for a refund of mortgage insurance premiums when your MI policy is cancelled. It depends on which type of MI product you have and certain other conditions. Consult your servicer about your particular situation.
This content was extracted from Radian & MGIC Mortgage Insurance websites and is intended to provide an overview of mortgage insurance and federal law relating to mortgage insurance cancellation. Some states also have mortgage insurance cancellation laws that may apply to your loan. The information presented in this section does not constitute legal advice. Contact your lender or servicer for more information on the law and how it applies to your mortgage.
You must contact your mortgage servicer to request cancellation or inquire how much longer mortgage insurance will remain on your loan.
Your rights as a Homeowner
The Homeowners Protection Act requires that mortgage insurance be cancelled when you build up a certain amount of equity in your home. This federal law applies to most types of mortgages.
When can MI be cancelled?
Individual investors establish the criteria for cancelling mortgage insurance based on a property's current value. HPA does not address mortgage insurance cancellation using current value.
When the balance on your mortgage reaches 80% of the home's original value or current appraised value, you may request cancellation of your MI. You must have a good payment history with respect to the mortgage, mortgage payments must be current and there can be no other loans against the home. Some lenders also require verification that the property did not decrease in value.
Fannie Mae and Freddie Mac typically require that the loan be seasoned at least 2 years AND
- That the borrowers have an acceptable payment history AND
- That the LTV based on a current appraisal be 75% or lower if less than 5 years have elapsed since the loan originally closed OR
- That the LTV based on a current appraisal be 80% or lower if more than 5 years have elapsed since the loan originally closed
Will Mortgage Insurance get cancelled automatically?
When the principal mortgage balance reaches 78% of the home's original value and payments are current, the lender is required to cancel the mortgage insurance automatically.
Is there a refund?
You may be eligible for a refund of mortgage insurance premiums when your MI policy is cancelled. It depends on which type of MI product you have and certain other conditions. Consult your servicer about your particular situation.
This content was extracted from Radian & MGIC Mortgage Insurance websites and is intended to provide an overview of mortgage insurance and federal law relating to mortgage insurance cancellation. Some states also have mortgage insurance cancellation laws that may apply to your loan. The information presented in this section does not constitute legal advice. Contact your lender or servicer for more information on the law and how it applies to your mortgage.