littleman


I am looking at refinancing my home loan and I was curious what an MIP (or an MPI…I don’t recall off hand) is for? I have been paying a mortgage “insurance” premium for a year now and I’m curious what it takes to get rid of that?

Any help?

6 Responses to “In a mortgage loan, how do you get rid of an MIP?”

1. jamesnbarnes on May 30th, 2009 8:14 am

   If it is an FHA loan and you are paying MIP, you have to pay the loan down to 78%. It is only .50% of the loan amount a year if it is an FHA loan. Pretty cheap considering it allowed you to get 100% financing that is assumable.

2. QuarterRoy on June 1st, 2009 2:38 am

   It will go away when you have paid enough of the Principal down so that the amount owed is only usually 80% of the actual value of your home. This is how it usually works. You really need to find out from the person you got the loan from if you don’t understand your mortgage papers.

3. tx_trotter95 on June 1st, 2009 4:06 am

   Federal legislation passed in 1999 mandates that the lender must cancel the PMI when the loan balance hits 78%. However, the borrower can request the cancellation when the loan value hits 80%.

4. perrinediane on June 3rd, 2009 8:31 am

   I had to pay 20% off my Mortgage Loan and then call my Mortgage Co. and request it.

   They may charge you what is equal to 1 mortgage payment to inspect your house prior to removing it. That’s what delayed mine–the extra $.

   They used to do this automatically–take it off but now it’s up the Homeowner to request it and many homeowners fail to do this paying for it with their mortgage payments all the while.

   good question

5. Jerod N on June 3rd, 2009 5:11 pm

   In most cases, people pay an insurance premium on their mortgage when their loan-to-value is high (in most cases, when your loan(s) are more than 80% of your homes value). Another reason for it could be credit related. It’s there to protect the lender in case of default. The best way to get rid of it is to shop around to different mortgage brokers or banks when you refinance. Many banks do not charge mortgage insurance. They may charge a higher interest rate however. This is why it’s best to shop around to numerous places before refinancing. Don’t always compare rates, but payments as well. Many people think having numerous credit reports pulled hurts your credit, but it doesn’t work that way. The credit bureaus only dock you the one time and the rest are gimmes because they realize you are shopping around for the best rate.

6. acwitte_99 on June 4th, 2009 4:23 am

   PMI or MI is Mortgage Insurance. You have to pay that on some loans including conventional and FHA if you owe more than 80% of what the home is valued at. (the appraised value). It’s in case you default on the loan. Example, if your home is valued at 100,000 and you owe less than 80,000 then you would not have to pay the PMI. To drop it, you have to show a Loan To Value ratio of 80% (or less) which is the example I show above. You can contact your Mortgage company and request an appraisal (you will have to pay for it) if you believe that your home has appreciated in value and you may have a LTV of 80% or less.
   Once they have determined that it is, you can request they drop the MI. This can save you a quite a bit per month so it’s worth the appraisal fee. Talk to the Mortgage company, most are willing to help. If you are refinancing anyway, you may be OK when they do the appraisal as long as you are not borrowing more than 80% of that value.

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