Get Rid of PMI for Good
If you own a home and are currently paying private mortgage insurance, you are most likely trying to figure out ways to remove it from your expenses. As you may know, PMI is exclusive to Conventional loans, and is applied when you put forth a down payment that is less then 20%. Here are some ways you can get rid of PMI for good:
Increase Your Home’s Value
If you want to easily remove PMI, try performing some upgrades on your home. When you do this, you are essentially decreasing the loan-to-value (LTV) ratio by helping the denominator grow. If you do this, you could get closer to the 80% LTV ratio you need in order to remove the private mortgage insurance. Make sure your upgrades are high value, such as a kitchen or bathroom remodel.
Make Mortgage Payments on Time
This is the most straightforward way of eliminating PMI: make monthly mortgage payments on time. When you do this, you are taking steps each month towards attaining your 80% LTV ratio. You will need to ask your lender to help you with this step once this happens. If you make an extra mortgage payment or two per year, you can expedite the process.
The good, old-fashioned way of eliminating PMI is to refinance. When you refinance, you’re qualifying for a new loan and you may be able to achieve that 80% LTV ratio. You can also lower your interest rate simultaneously.