If your mortgage was more than 80% of the purchase price of your home you are very likely paying mortgage insurance. You may have even forgotten about it as it’s included in your monthly mortgage payment. With the real estate market heating up and home prices showing noticeable improvement, I suggest you revisit the necessity of mortgage insurance.
Mortgage insurance, unlike other insurances that you are paying for, is not in place to protect you. It is there to safeguard the lender in the event that you default on your loan. So it only stands to reason that it would be in your best interest to stop paying for it.
There are a
couple ways to accomplish this. The most likely positive result is through
refinancing. With mortgage rates still in the highly favorable range this is a
valid consideration. There are of course the usual closing costs associated
with any loan. Your lender will assist you in determining whether or not the
cost of a refinance is a worthwhile expenditure. And one caveat, refinance or
not, you will still need to have a loan to value ratio of 80% or less. It’s
always worth the effort to inquire, it costs you nothing to evaluate your position.
Your other
option is simply to ask. Did you know that you are entitled to request the
removal of mortgage insurance? If you’ve paid your mortgage consistently and
have reduced the mortgage amount to 80% of your home’s original value, an
appeal to your lender to cancel your mortgage insurance would not be out of
line. There are no guarantees. Stumbling blocks can include; current real
estate values, your payment history, additional mortgages or equity loans on
the home, or simply you lenders opinion. But again… it costs you nothing to
ask.
