If you bought your home with less than a 20% down payment in most conventional loans, you have an added fee in your loan, Private Mortgage Insurance, or PMI. But once your principle reaches more than 20% of the loan value, you can qualify to get rid of PMI, which could save you significant money on your monthly payment. And be a big help to the monthly bottom line.
As you’ve been making payments, you’ve been lowering the amount you owe on the loan. In addition, over the last few years — in most areas across the U.S., home values have been increasing significantly. And this change could qualify you to get rid of that monthly PMI payment ahead of schedule. If the new appraised value of your home (for some, this has recently been assessed by your local county auditor) is high enough, you can refinance your loan and eliminate PMI because the new value of the loan is LESS than 80% of the home’s value.
For example, if you made a 10% down payment on your home, and your home has appreciated 15% in value since that loan, your refinanced loan on that amount would be less than 80% of the home’s value. Therefore, that refinance would eliminate PMI.
Give yourself the chance to save money every month…for the life of your loan. We’d be happy to run the numbers for you and see if we can help!
