Have You Gotten Rid of Your Mortgage Insurance Yet?

Happy New Year! From a business perspective, I don’t think we are going to miss 2023. But as we look forward to 2024, I think there are many reasons that we can be optimistic. Today, I want to look at the topic of getting rid of your mortgage insurance.

Did You Buy Between 2020 and Early 2022?

There are a bunch of people who were buying homes between 2020 – 2022, when options were available to get into a property with low down payments. A lot of those loans were conventional, not FHA.

The question is: did you buy during this time and are you still paying mortgage insurance? If you are, then you might be in a position to save yourself a few hundred bucks… or even up to $500, $600, or even $700 per month (depending on the loan size and other factors).

How to Get Rid of Mortgage Insurance

This is something that you have to do through your current servicer. They are going to want to see that you have at least 22% equity. You’ll need to take your loan amount and divide it by 78%. That will get you the minimum value. If you are already at this point, you can call to ask to remove the mortgage insurance.

They are going to send you to a specific department that handles these things. Truthfully, it isn’t a fun process. If they come up with a value that is very different than you think, then it’s possible that they may charge you for an appraisal. But it could be very worth it because of the money that could be saved!

If you bought in 2020 or 2021, then you likely have an excellent interest rate and you aren’t going to refinance that mortgage. So, just get rid of the mortgage insurance to save yourself money every month.

Conventional vs. FHA Loans

This strategy only works for conventional loans. For FHA loans, unless you had at least 10% down, then it means that the mortgage insurance is permanent and the only way to get out of it is to refinance. But with conventional loans, there are options available. Call your servicer. Or, call me if you have general questions about the process.

For what it’s worth, I got rid of mortgage insurance on one of my own loans a while back. So, I know it’s a possibility. And I also know that they don’t make it easy.

If any of your New Year’s resolutions are focused on finances, then eliminating mortgage insurance could be part of your strategy for saving money. Reach out if you have questions!