Cancellation of Private Mortgage Insurance (PMI)

The Homeowners Protection Act of 1998 established rules for automatic termination and borrower cancellation of Private Mortgage Insurance (PMI) for home mortgages. These protections apply to certain home mortgages signed on or after July 29, 1999 for the home purchase, initial construction, or refinance of a single-family home. It does not apply to government-insured FHA or VA loans, or to loans with lender-paid PMI.

With certain exceptions (home mortgages signed on or after July 29, 1999) your PMI must be terminated automatically when 22% of the equity of your home is reached, based on the original property value and if your mortgage payments are current. It can also be canceled at your request with certain exceptions, when you reach a 78% Loan to Value Equity position, again based on the original property value, and if your mortgage payments are current.

Exceptions:

1. If your loan is deemed "high risk" from your servicer.
2. You have not been current on your payments within the year prior to termination time or cancellation.
3. If you have other liens on your property.

This is general information. It is important to ask your lender or mortgage servicer for information about these requirements at any given time as it is each servicers right to form policies on this.  Federal law does NOT require your lender or mortgage servicer to cancel the insurance or remove it until you have reached 78% Loan to Value based on original loan terms and the normal amortization process of that loan.