Yup, just took $200/mo off my monthly payment by sending an email to the mortgage co.
I'm 1) pumped how easy this was but 2) pissed I didn't do this 2 years ago.
We bought our house in 2020 and only put down 10%. I have not been paying anything early because im in no rush to remove the cheapest debt i have (3%). Our home value (as most have) has gone up a lot since we bought in 2020. I just passed the 20% equity line based on original home value, but the mortgage company doesn't automatically remove PMI until you hit 25% which in my case would've been 2 more years. All i did was fill out a 1 page form and email it to Service Mac and they took off the monthly charge. Cant believe how easy that was.
The bummer is that because of how much home values have gone up in my area (Southern NE), my equity level based on current value has been above 35% for like 2 years.. which means i couldve done this very simple task much earlier.
Im a lurker by trade but feel compelled to share this with as many people as possible… if you bought a home with less than 20% down between 2019 and 2022, please, please, go check with your mortgage company and see if you can have PMI removed early. $200 a month may not be life changing but it does offset some of the big increases in taxes and homeowners insurance from the last few years.
Mortgage Company just waived PMI with nothing but an email
byu/Supple5151 inpersonalfinance
Posted by Supple5151
11 Comments
It is a shame most people will probably never realize this or check to see if they can get there PMI removed. Pretty much anyone who bought in 2022 or before should not be paying PMI right now. I bought my place in 2021 and my PMI would have not been automatically removed till 2028 and I had mine removed earlier this year
>I just passed the 20% equity line based on original home value, but the mortgage company doesn’t automatically remove PMI until you hit 25% which in my case would’ve been 2 more years
Legally speaking, they’re required to to remove it at 78% LTV based on the original amortization schedule (e.g. paying extra and home value increases don’t affect this date).
>Im a lurker by trade but feel compelled to share this with as many people as possible… if you bought a home with less than 20% down between 2019 and 2022, please, please, go check with your mortgage company and see if you can have PMI removed early.
Keep in mind that per the loan investor PMI removal guidelines, loans that are between 2 and 5 years would require 75% LTV (when using appreciation) or documented proof of major improvements.
EDIT: In case people wanted the receipts:
https://www.federalreserve.gov/boarddocs/supmanual/cch/hpa.pdf
>Automatic Termination
>
>A servicer must automatically terminate PMI for residential mortgage transactions on the earliest date that both
>
> * The principal balance of the mortgage is first scheduled to reach 78 percent of the original value of the secured property (based solely on the initial amortization schedule, in the case of a fixed-rate loan, or on the amortization schedules, in the case of an adjustable-rate loan, regardless of the outstanding balance) and
> * The borrower is current on mortgage payments.
Happy for you. About 2020 I was on here and someone recommended asking to remove PMI after hitting 20%. I called my servicer (my CU at the time) and they just needed to take photos inside and out and boom – waived. Happy you didn’t even need that…
Thanks for the info I’m buying a house next month and this will come in handy. How did you provide them proof it’s gone up or did you just state that on the email
How did you word your email?
What type of mortgage do you have? I tried removing my PMI and was told it was required for FHA loans.
You can save so much money by being a little proactive like this in different ways. Shopping around for car insurance, for instance.
Nice.
Lemme drop in my story as a PMI warning to any lurkers:
My mortgage broker (who originated then promptly sold it) convinced me that, since I hadn’t sold my old house yet, I should finance at 5%, then sell the old house, put enough dollars in to get to 20%, recast (reamortize) the mortgage, and then at that point PMI would go away because I was at 20%.
I did this to the letter, then when I went to ask for the PMI to be removed, they said that in the five-ish month span in the early 2020s between originating the loan and asking for PMI removal, my home value went _down_, therefore my loan-to-value was not at the 80%-or-less rate required to remove PMI.
I called the guy who wrote my mortgage and he was like “huh, that shouldn’t have happened”, and…that was it. Pretty bad. Ended up holding it for like two years and then at that point I had to get a sort of appraisal to get it removed (and the guy who came over to do the job was like “why am I here”, haha).
I’ve been meaning to do this myself. Worst they can say is no.
Because your post, I just called my mortgage company. They put in a request for me and I’ll get a letter or approval or rejection in the next 30 days. I’ll save THOUSANDS if this pays off. Thank you for the pro tip!
You likely couldn’t have dropped it off like this two years earlier. It usually only drops off based on the original value. Sometimes you can drop it off based on appreciation with an appraisal, but that varies by lender.