Metro Brokers Financial

About Private Mortgage Insurance

During the recession, many banks went out of business because people defaulted on their loans, most of them with little to no down payment. Private Mortgage Insurance (PMI) was designed to protect the lender in these specific cases.

Typically, borrowers only need to pay PMI if they are putting down less than 20 percent on their new mortgage. New homeowners are required to pay this additional insurance each month along with their mortgage.

Eliminating PMI

If you have PMI, and you’ve paid down the principal of your loan to 80 percent of the original loan value, you can contact your mortgage company and provide a written request to cancel your PMI. In most cases, the homeowner must also have a good repayment history with that company and have proof of the current home value. This will require a professional appraiser at a cost of approximately $375-$500. Your home equity must have improved so that the loan-to-value ratio is 75% or less.

Federal law also requires mortgage insurance to be canceled automatically when the borrower has paid down their mortgage loan to 78% of the original loan amount.

If you want to learn more about PMI, contact a Metro Brokers Financial loan officer today at 404.847.2525.

Metro Brokers Financial, Inc., 5775-D Glenridge Drive, Suite 200, Atlanta, Ga. 30328 A Georgia Residential Mortgage Licensee # 5892. NMLSR Unique Identifier # 163853. 404-847-2525