Once you own a significant portion of your home, usually around 20%, this insurance policy can, and should, be eliminated. Recently enacted federal law made it a little bit easier to rid yourself of your monthly mortgage insurance premium by requiring your lender to automatically eliminate your mortgage insurance, once you own 22% of your personal residence. Unfortunately the 22% equity is based on the value of your loan compared to the home’s purchase price so the lender is not taking into account appreciation on your home – just the gradual paydown of your mortgage.
In addition, these new laws did not take effect until July of 1999. If your mortgage was taken out prior to this date, you will need to check with your lending institution to find out how to eliminate the monthly mortgage insurance premium.
Material discussed is meant for general illustration and/or informational purposes only and it is not to be construed as tax, legal, or investment advice. Although the information has been gathered from sources believed to be reliable, please note that individual situations can vary therefore, the information should be relied upon when coordinated with individual professional advice.