Private Mortgage Insurance is not insurance that protects you the buyer. This insurance is bought, and generally required, by the mortgage company when you take out a conventional loan and do not put at least 20% down. This insurance is paid by you, usually included in the monthly payment, and unless you request it's removal, will stay in your monthly payments the entire life of the loan.

What Do I Do To Remove It?

Mortgage companies vary greatly in what they require in order to successfully have Private Mortgage Insurance removed. Below are step by step directions to have PMI removed from your loan.

Call your mortgage companies customer service department and ask for full instructions for the removal of PMI. If the person answering the phone doesn'tseem knowledgeable, ask for a supervisor. Be sure to get this in writing.Even if you buy your house considerably below the appraised value don't expect the mortgage company to consider removing the PMI until you have atleast 1-year seasoning on your loan. Some mortgage companies require at least 2 years. After this waiting period you can make the request. Even if youwait 1 or 2 years, depending on the mortgage company, you will not be able toremove the PMI if you were late on any of the payments. Remember your payment is due on the first of each month and late generally on the 15th, 16th,or 17th.

What Can I expect The Mortgage Companies To Require?

Most mortgage companies want to know for sure that you own 80% or lessloan to value. For example: If the house is worth $100,000 your loan must be $80,000 or less. In order to determine the value most mortgage companies will require a fee based appraisal from one of their approved appraisers. Some mortgage companies have started accepting a professional CMA which is what a good Realtor can provide for you at no cost. Once all these items are in place chances are you can have the PMI removed saving you several hundred dollars per year.FHA requires Mortgage Insurance for the entire life of the loan.

Recap

1. Call mortgage company for written instructions.

2. Waiting period 1 to 2 years.

3. Proof of value through a fee based appraisal or Realtor CMA (if allowed)

4. Perfect payments through the waiting period.

5. Letter from you requesting PMI removal.