We have many borrowers with both FHA (MI) and Private Mortgage Insurance (PMI) now, and they all want to know how or when they can get out of their MI obligation.
With FHA, you must keep your MI for 5 years no matter what. Then, after 5 years, you can get out of MI if you provide an appraisal to your loan servicing agent that proves you are at 78% LTV (loan-to-value) or less.
With PMI, you can get out of the obligation immediately or at any time by simply paying the loan down to 78% of the appraised value at the time you took out the loan. Eliminating MI in this event is required by law. You will need to contact your loan servicing agent for the proper procedure.
If you do not pay down the loan to get to 78% LTV and instead wish to wait for “appreciation” to get out of the obligation, Fannie and Freddie require a minimum of two years of payments with MI. After two years, Fannie and Freddie require an updated appraisal that proves you are at 80% LTV or less. Again, contact your servicing agent for the proper procedure.
Call Jay Voorhees at (925) 855-4491
Real Estate Broker, CA Bureau of Real Estate, BRE# 01524255, NMLS# 335646