New Visitors Privacy Policy Sponsorship Contact Us Media
Baby Boomers Family Green Home and Auto In Critical Condition Just Starting Out Lifestyle Money
- advertisement -
Bankrate.com
News & Advice Compare Rates Calculators
Rate Alerts  |  Glossary  |  Help
Mortgage Home
Equity
Auto CDs &
Investments
Retirement Checking &
Savings
Credit
Cards
Debt
Management
College
Finance
Taxes Personal
Finance

Ask Dr. Don
Bankrate.com

Private mortgage insurance

Dr. Don,
How do I find out if I am paying PMI on my mortgage? If I am, what can I do to stop that monthly expense?
Rocio

Dear Rocio,
Most lenders require private mortgage insurance (PMI) on a first mortgage when the loan represents more than 80 percent of the home's purchase price or appraised value, whichever is less. The insurance protects the lender if the borrower defaults on his mortgage but the borrower pays the insurance premiums.

If you didn't put 20 percent down and this mortgage isn't a refinancing, then odds are that you are paying PMI premiums. (FHA loans have a government administered mortgage insurance program.)

- advertisement -

If you can't tell from your monthly statement whether you are paying mortgage insurance premiums, then review your mortgage documents or call the originating lender.

The Homeowners Protection Act requires lenders to cancel PMI policies when the loan balance gets below 78 percent of the purchase price for homes with mortgages that closed on or after July 29, 1999. All homeowners, regardless of when their mortgage closed, can petition the lender to cancel PMI when the loan falls below 80 percent of its appraised value.

The law also requires lenders to provide an annual disclosure notice about their procedures for canceling PMI including the address and telephone number of the mortgage servicing company. This disclosure notice is sent to all homeowners that pay PMI regardless of when the loan closed.

This Bankrate article provides more background on the Homeowners Protection Act.

-- Posted: Aug. 6, 2001

Read more Dr. Don columns
See Also
Financial advice glossary
More Dr. Don stories

Print   E-mail

National Mortgage Rates
OVERNIGHT AVERAGES
Rates may include points.
30 yr fixed mtg 4.08%
15 yr fixed mtg 3.19%
5/1 jumbo ARM 3.71%



RELATED CALCULATORS
  Calculate your monthly payment  
  How much house can you afford?  
  Fixed or adjustable rate: Which is right for you?  
VIEW ALL 

BASICS SERIES
Mortgage Basics
Follow the process from house hunting
to closing.
How much can I afford?
How much is my payment?
What documents do I need?
What is a home inspection?
What is the closing?
Can I remove PMI?

MORE ON BANKRATE
Mortgage rates in your area  
Graph rate trends  
Credit scoring  
Mortgage basics


- advertisement -
top of page
 
- advertisement -

About Bankrate | Privacy Policy/Your California Privacy Rights | Online Media Kit | Partnerships | Investor Relations | Press Room | Contact Us | Sitemap
NYSE: RATE | RSS Feeds |

* Mortgage rate may include points. See rate tables for details. Click here.
* To see the definition of overnight averages click here.

Bankrate.com ®, Copyright © 2014 Bankrate, Inc., All Rights Reserved, Terms of Use.