3 ways to get rid of mortgage insurance | U.S. Bank (2024)

FAQs

How to get PMI removed US Bank? ›

Ask to cancel your PMI: If your loan has met certain conditions and your loan to original value (LTOV) ratio falls below 80%, you may submit a written request to have your mortgage servicer cancel your PMI. For more information about canceling your PMI, contact your mortgage servicer.

To request cancellation of PMI, you should contact your loan servicer when the loan balance falls below 80 percent of your home's original value (the contract sales price or the appraised value of your home at the time it was purchased).

You have the right to ask your servicer to cancel PMI on the date the principal balance of your mortgage is scheduled to fall to 80 percent of the original value of your home. The first date you can make the request should appear on your PMI disclosure form, which you received along with your mortgage.

One path to removing PMI from your mortgage without refinancing is to build up the equity in your home. In this case, your PMI can be automatically removed when you reach a certain amount of equity.

You can typically remove PMI if market conditions lead to a significant increase in your home's value. You have to make a request with your lender and order a new appraisal. The appraisal confirms your property value rose enough to where you own the required amount of equity.

There are other ways to get rid of PMI ahead of schedule: refinancing, getting the home re-appraised (to see if it's increased in value), and paying down your principal faster.

The letter should include the homeowner's name, address, and loan number, as well as their request to cancel PMI payments. It should also include any relevant documents or information that the lender may need to process the request.

You can request to have PMI removed from your loan when you reach 80% LTV in your home. You can achieve an 80% LTV ahead of schedule if your home's value increases or if you make extra loan payments.

On a 15-year term, MIP is canceled when your LTV reaches 78%. For longer terms, the LTV requirement remains the same, and you have to pay MIP for at least 5 years.

Can mortgage insurance be written off? ›

The mortgage insurance (PMI) deduction expired after the 2021 tax year. For eligible years, PMI was deductible only if you itemized your tax deductions. Most borrowers pay mortgage insurance premiums when putting down less than 20% on a home.

Generally, when you take out a conventional loan, your lender will require an escrow account if you borrow more than 80% of the property's value. So, if you make a down payment of 20% or more, your lender will likely waive the escrow requirement if you request it.

If you've paid the principal balance below 80% of the home's original value, PMI can typically be removed. This process involves getting a new appraisal to determine the home's current value and ensuring it meets the lender's requirements under the Homeowners Protection Act.

Separating tax and homeowner's insurance payments for your mortgage's principal and interest payment is most commonly done at the time the mortgage is made; this "escrow waiver" by the lender allows you to take care of your property taxes and insurance payments.

While your mortgage lender can no longer require you to carry home insurance after you pay off your mortgage, it's up to you to protect your investment.

PMI is automatically removed when your loan-to-value (LTV) ratio reaches 78%. You can request to have PMI removed from your loan when you reach 80% LTV in your home. You can achieve an 80% LTV ahead of schedule if your home's value increases or if you make extra loan payments.

Many lenders (like Fannie Mae) also require a two-year “seasoning requirement,” meaning you can't have PMI removed until you've made two years' worth of on-time payments—even if your equity has grown above 20%. If it's been less than five years, you might even be required to have 25% worth of equity.

If the mortgage insurance was financed at the time of origination and is canceled prior to its maturity you may be entitled to a refund if the refundable option was chosen at the time of origination. However, if there was no refund/limited option, this would negate any option for a refund.