HOW DO WE GET OUR PMI REMOVED?
PRIVATE MORTGAGE INSURANCE (PMI) BASICS FOR CONSUMERS

Private mortgage insurance is required when the down payment for a home loan is less than 20 percent. This insurance protects the lender or investor against foreclosure losses. The Buyer pays for the PMI insurance and the payment depends on the down payment and type of loan. For example, if you pay 5% down, the PMI company will insure, or guarantee, the top 10% of the loan. If you go into default, they will reimburse the lender. PMI insurance is included in the monthly housing payment.

A law providing for PMI cancellation of private mortgage insurance went into effect July 29, 1999, putting the force of law behind homebuyers who have taken out loans since that date and request PMI cancellation once their equity reaches 20 percent. Cancellation is automatic once their equity reaches 22 percent. The law also requires lenders to inform borrowers about changes in their mortgage insurer.

The provisions don't apply to loans made before July 29, 1999 though lenders have historically allowed borrowers with good payment records to request cancellation once they've accumulated 20 percent equity. And lenders with Fannie Mae or Freddie Mac conforming loans may offer borrowers automatic PMI cancellation once their loans are halfway through their amortization term, regardless of when the loans were made.

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