FINALLY Remove Your PMI - Tips from a Loan Officer

private mortgage insurance it's kind of this boogeyman word that you'll hear get thrown around a lot is something that you want to avoid if you're getting a mortgage but in reality it's kind of a necessary evil especially if you're buying a home with less than 20 down the good news is if you've bought a home within the last two years you're probably in a great position to finally get rid of that private mortgage insurance from your home loan and so on this episode i've partnered up with my friends over at moneyunder30.com to give you guys some great tips on how to remove private mortgage insurance early and what you could do with those savings to pay off your mortgage sooner coming up [Music] what's up guys welcome back to the channel my name is katon i'm a loan officer from san diego california and on this channel i help people just like you learn how to buy their first home and navigate the mortgage process now if you learned something new today make sure you hit that like button and if you want to see more content just like this hit subscribe and ring that bell so you can get notified every time i post new content and as always if you have any questions while you're watching this video make sure you leave them in the comment section down below i'll be happy to answer any of your questions anything that i mention in this video will actually be linked in the description along with the timestamps for this video well now that that's out of the way let's just jump right on into it all right so if you bought a home and you put less than 20 down and you didn't use a va loan there's a pretty good chance you probably have mortgage insurance on your home loan that you're paying for every single month now what exactly is pmi well for short pmi is just private mortgage insurance it's an insurance policy that the mortgage lender makes you the homeowner pay for in the event that you were to for whatever reason default before you hit that magical 20 equity market that they're looking for now if you want to dive a little bit deeper on what exactly private mortgage insurance is i'll make another video on that later but i've also linked a great article from money under 30 that breaks down exactly what private mortgage insurance is but today i just want to focus on what we can do to finally stop paying insurance and put some of that money back into your pocket for most homeowners people think that the only way that you can actually save money on your mortgage is through a refinance and while yes that's true that's one way that you can save money on your mortgage if you're paying pmi and you're paying close attention to your home's values you can actually leverage that information to stop paying pmi earlier than what's actually scheduled and thanks to the huge housing boom that we've had over the last few years a lot of homeowners without even knowing it are already in a great position to start saving some money on their mortgage right away by removing pmi early now a quick little disclaimer for all my homeowners who have an fha loan on their home depending on how much you put down your pmi could be on there for life or for 11 years you'll want to check out my other video talking about the 23 things you didn't know about fha loans for some more information on how you can get rid of that pmi all right now if you're trying to get rid of your mortgage insurance you're going to have to get there through one of three ways the first one is what i like to call the automatic way now you'll see this in your closing disclosure and you'll actually see a schedule of when the mortgage insurance is scheduled to fall off you see for conventional loans your mortgage insurance is scheduled to fall off automatically once your amortization schedule hits 78 of the appraised value of your home now that sounds really complicated but essentially all that is is your loan balance has to be 78 of the original value of the home when you bought it that doesn't count what the value of it right now is it's just how many payments does it have to be to get there and that really depends on your individual loan and the interest rate that you have as well as the down payment that you put but there's going to be an automatic time when your mortgage insurance is going to automatically fall off now while your mortgage lender has to automatically remove mortgage insurance once you hit 78 loan to value if you believe that your home has gone up in value in the last few years or maybe you started paying a little bit extra to your principal and you've been reducing the balance of your loan a lot faster than what's scheduled you can actually request that your mortgage lender remove mortgage insurance once you believe it's hit 80 percent loan to value now what's great about this way is it's not based on the loan to value of the original value of the home but is actually based on the value of the home today this method is great because you don't have to go through the full process of a refinance essentially all you have to do is take a look at the phone number on your mortar statement call up your mortgage servicer and say hey i think my home's worth a lot more than what i originally bought it for i'd like to request an appraisal to see that if i've hit that 80 loan to value now you're gonna have to pay for an appraisal which nowadays runs anywhere from 500 to 700 depending on what kind of property you have you have to wait for those appraisal results to come back and if it turns out that you do in fact have 80 loan value your mortgage lender can go ahead and remove that mortgage insurance early and this right now is the position that a lot of homeowners don't realize that they're in because of the increasing values around them now some lenders do have limitations on how soon you can actually do this most mortgage lenders are gonna have to require you to pay at least 12 months of payments before you can remove mortgage insurance so just kind of keep this in mind and you know give a call to your mortgage lender and ask them what the rules are for removing mortgage insurance early and requesting that appraisal this is also a specially good option if you've fallen into a windfall of money whether it's winning the lottery getting an inheritance maybe cashing out on your crypto but if you've been paying a little bit extra down on your balance this is some place where you can apply that money to reduce the amount that you're paying every single month by getting rid of mortgage insurance early and the last option of course is refinancing your mortgage if you're in a spot where rates are lower than what you originally bought the home for you can basically knock out two birds with one stone by not just removing the mortgage insurance that you've got every single month but also lowering your interest rate as well okay so you've removed your mortgage insurance now you're saving you know 100 150 200 bucks extra a month what do you do now well a lot of homeowners probably didn't even realize that they could remove mortgage insurance and are probably pretty comfortable with their payment so what i would recommend doing is if you're going to remove mortgage insurance and you're comfortable with the payment that you're already making go ahead and start applying that extra payment to principal essentially making the same mortgage payment that you have right now but every dollar above that minimum payment that you're contributing is going to help you pay off your mortgage a lot faster i've actually left the link in the description below to my custom mortgage calculator that's going to show you how that extra principle that you add onto your mortgage payment every single month is going to speed up how fast you can actually pay off your mortgage check it out now of course the other alternative is to take those monthly savings and put it towards other investments maybe you want to pay off some of your credit cards a lot faster maybe you want to take that money and put it into some stock market investments maybe to your retirement whatever it might be being able to save that money is going to help your finances as a whole so whether it's being used to pay off your mortgage early make some investments pay off some debt whatever you're going to do take that money and put it to use for you and your finances paying pmi at the end of the day is a necessary evil for a lot of homeowners but it's essentially leveraged for you to get into a home without having to pay that full 20 down and start building wealth for your family and with the increasing values nationwide you can leverage this great moment in time because you've already got a great interest rate and now you can leverage the fact that your home's value continues to rise every single year in order to get rid of that pmi early and start taking those savings and doing something else with it whether that's paying off your mortgage early paying off some credit card debt some personal loans whatever it is but using those savings now and leveraging the fact that you have more equity in your home without even having to refinance and get rid of that great interest rate that you have so what would you do if you could save a few hundred bucks off your mortgage every single month let me know in the comment section down below how much you're paying for mortgage insurance and what you would probably do with those savings and help other homeowners as well think of some options for them to help them with their finances too now if you have more specific questions on how you can get rid of the mortgage insurance on your home loan and you live in california feel free to reach out to me i'll be glad to help you navigate that process now if you have any more questions how to get rid of your mortgage insurance or have any suggestions on what content you want to see leave it down in the comment section down below here's a few more videos that i think you guys are going to like once again thank you so much for watching i appreciate it so much hit that subscribe button ring that bell and i'll see you on the next one bye

Channel: Caton Del Rosario - Millennial Mortgage Pro

Views: 18,748

Keywords: remove pmi, removing pmi, remove mortgage insurance, cancel pmi, pay off pmi, mortgage insurance, pmi, avoid pmi, private mortgage insurance, remove pmi 2022, remove pmi conventional loan, remove pmi fha loan, cancel mortgage insurance, how to get rid of pmi, get rid of mortgage insurance, no mortgage insurance, mortgage insurance rules, stop mortgage insurance, pmi requirements, what is pmi, home loans, first time home buyer pmi, downpayment pmi, mortgage pmi

Id: GmCMwGQNUbU

Length: 8min 23sec (503 seconds)

Published: Thu Dec 02 2021