Tuesday, April 21, 2009

How To Get Out of (PMI) Private Mortgage Insurance

How To Get Out of PMI Private Mortgage Insurance

If you bought a home and did not put down 20% you may be paying private mortgage insurance (PMI) each month. Private mortgage insurance can sometimes run as high as $300-$500 per month. That is a lot of extra money to pay for virtually no reason.

If you have found yourself in the situation, the best thing to do is refinance. You will need to check with your current lender to find out if you have a pre-payment penalty. A pre-payment penalty is a fee that you will have to pay if you pay off your mortgage loan early. Sometimes there is a pre-payment for just a few years at the beginning of your loan.

If you have a pre-payment penalty you may want to wait until the penalty time frame is over. If you do not have one, you will want to refinance as soon as your house appraisers for the amount you need.

Your house will need to appraise high enough so that your loan is only 80% of the value or less. When you think it will appraise for that amount, call an appraiser. Make sure you use a qualified appraiser. You may want to contact a lender first and they can help you find an appraiser, they may even pay for the appraisal for you.

The most credible lenders are the ones that you already work with such as your bank. Contact a lender today to see if you can get out of (PMI) private mortgage insurance.

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