What is Private Mortgage Insurance (PMI)?
Private mortgage insurance is insurance that protects the lender in case the mortgagor (borrower) defaults on the mortgage.

When is private mortgage insurance required?
Generally when you put less than 20 percent down on a home mortgage, lenders will require you to have Private Mortgage Insurance (PMI). PMI protects the lender if you default on the loan.

Private Mortgage Insurance is expensive can I get rid of it?
The Homeowners Protection Act of 1998 established rules for automatic termination and borrower cancellation of PMI on home mortgages. These protections apply to certain home mortgages signed on or after July 29, 1999 for the purchase, initial construction, or refinance of a single-family home. These protections do not apply to government-insured FHA or VA loans or to loans with lender-paid PMI.

When does private mortgage insurance automatically terminate?
For most home mortgages signed on or after July 29, 1999, your PMI must be terminated automatically when you reach 22 percent equity in your home based on the original property value, This does not apply if you are not current on your payments or if you have late payments on your mortgage.

When can I cancel private mortgage insurance?
Your PMI also can be canceled, You can request they cancel your private mortgage insurance when your equity in the property reaches 20 percent based on the original property value, This only applies if your mortgage payments are current.

Are there exceptions to the cancellation and termination rules?
Yes. One exception is if your loan is high-risk. A cash-out refinancing would be considered high-risk.
Another is if you have not been current on your payments within the year prior to the time for termination or cancellation.
A third is if you have other liens on your property. For these loans, your PMI may continue. Ask your lender or mortgage provider (the company that collects your payments) for more information about these requirements. The above rules also do not apply to loans issued prior to 29 July 1999.

What if my loan is from before July 29, 1999?
If you signed your mortgage before July 29, 1999, you can ask to have the PMI canceled once you exceed 20 percent equity in your home. But federal law does not require your lender or mortgage servicer to cancel the insurance.
Further, state law may provide you with the right to cancel the PMI. Fannie Mae and Freddie Mac, which buy home mortgages from lenders, also may have guidelines affecting termination or cancellation of PMI on home mortgages signed before July 29, 1999. Check with your lender or mortgage servicer, or call Fannie Mae or Freddie Mac, for more information.

Private Mortgage Insurance is expensive can I deduct it on my federal income taxes?
Yes, at least until 2010, if your families AGI is less than $100,000. There is a partial deduction for families whose AGI is less than $109,000.00

Will I represent people trying to get PMI cancelled?
Yes, but generally speaking most people can do this by themselves and do not need to hire an attorney to assist them. If you are too busy or otherwise desire representation please contact me at 773 275-0754 and I will be happy to assist you.