The law generally provides two ways to remove PMI from your home loan: (1) requesting PMI cancellation or (2) automatic or final PMI termination. Request PMI cancellation You have the right to request that your servicer cancel PMI when you have reached the date when the principal balance of your mortgage is scheduled to fall to 80 percent of the original value of your home.
Jumbo loans (those loans that exceed the Fannie Mae/Freddie Mac conforming loan amount of $417,000) will be eligible for PMI cancellation at the 77% equity position. The more recent loans in some areas where the conforming loan limit was increased above the $417,000 amount raises questions that can only be answered by contacting the lender.
All improvements have to be called out specifically in a new appraisal. If you’re requesting removal of your PMI based on natural increases in your property value between two and five years after your loan closes, both Fannie Mae and Freddie Mac require a new appraisal, and the LTV has to be 75% or less.
Translation: You can cancel the PMI on your Fannie Mae mortgage even before you’ve paid down very much — if home-price appreciation in your area has been strong. If you put 10 percent down for your purchase a year ago, and home prices are rising quickly, you might reach the cancellation point faster than you might think.
Q1. What is private mortgage insurance? Private mortgage insurance protects a lender against loss if the borrower defaults on his or her mortgage loan. private mortgage insurance premiums may be paid by the borrower, the lender or an investor. Q2. How is mortgage insurance related to the business of Fannie Mae?
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When can I remove private mortgage insurance (pmi) from my loan?. including Fannie Mae and Freddie Mac. Mortgage Insurers – fanniemae.com – Fannie Mae’s Congressional Charter requires credit enhancement on mortgage loans it acquires with unpaid principal balances in excess of 80 percent of the value of the mortgaged property.
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Below are Fannie Mae and Freddie Mac guidelines for PMI removal. PMI is automatically canceled when the LTV reaches the scheduled 78% date based on the original amortization schedule. The loan must be current for the automatic cancellation to occur. Early cancellation based on the original property value