How to remove PMI for mortgage
PMI is also known as Private Mortgage Insurance. You are required to have it unless you have more that 20% equity in your home. If does not pay off your mortgage if you die. It is a pool of money that lenders can dip into if they take a loss on a particular loan.
John: Question about PMI insurance on mortgaging at home, my home. I think you're saying that the value of my property is extremely low based on the market values your neighbors are selling their house for. I've been trying over the last few years to drop the PMI and they send me these letters when I put the request in that I have to go through a new appraisal and it has to be done through them. I feel like I'm involved in a racket.
Attorney Tom Olsen: Well, John, let's bring the listeners up to speed. When you borrow money and you have less than 20% equity in your property, your lender will make you get PMI insurance, you're going to have to pay for it but it does you absolutely no good whatsoever, it's a pool of money that lenders can dip into when they've taken a loss on any other piece of property. John, once you have gained more than 20% equity in your property because you have paid down your mortgage or because the value of your property has gone up, then your lender will work with you to drop that PMI insurance.
If your lender says, "John, for us to drop your PMI, you have to pay us to get an appraisal and we're going to pick the appraiser." John, go ahead and do it.
Attorney Tom Olsen: Good luck to you, it's great to get rid of that PMI and put that extra money in your pocket every month.