Private Mortgage Insurance - How You Can Ease Its Burden |

Feb 27, 2013, 15:16 ET from

LOS ANGELES, Feb. 27, 2013 /PRNewswire-iReach/ -- Odds are if you put down less than 20% when you purchased your home, your lender required you to buy private mortgage insurance (or, PMI). For your lender, PMI offers extra protection. But for you, PMI just offers extra expense!

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Like its name implies, PMI protects your lender in case you default on your loan. If you do, they won't be completely out of luck. Instead, they'll use the money you paid in PMI premiums to recoup some of their losses. The exact amount you pay in PMI will depend on the size of your mortgage, the amount of money you put down, and your credit score. Most people wind up paying at least $100 or so each month.

Luckily, you don't have to pay PMI forever. In fact, your lender is required by law to terminate your PMI once you've paid off 20% of your mortgage – as long as you're current on your payments.
But that doesn't mean you can just pay off your mortgage faster and automatically get rid of your PMI.

Even if you pay more than the minimum balance every month and reach your 20% threshold quickly, your lender doesn't have to get rid of your PMI policy. That's because the law only requires them to terminate your PMI when your loan would have been scheduled to reach the 20% threshold – not when it actually does. And, if your home goes down in value in the meantime, your lender can deem it "risky", and require you to keep making your PMI payments. So, how can you ease the burden of PMI sooner rather than later?

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-  Ask your lender
Just because your lender doesn't have to get rid of your PMI doesn't mean that they won't. So, you can plan to pay off your mortgage faster, get to the 20% threshold, and then ask your lender to terminate your PMI. Even if they don't agree, you'll be that much closer to getting out from under your mortgage!

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-  Get rid of your second mortgage
The more debt you have, the riskier you're going to look in the eyes of your lender. So, they'll be a lot less likely to agree to terminate your PMI if you have a second mortgage hanging over your head.

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-  Refinance
If all else fails, get a new loan! If you've got 20% equity in your home, you can refinance, and your new loan won't require you to pay PMI. Sure, you'll have to pay all of the fees associated with refinancing, but in the long run, it could end up saving you money!

Media Contact: James Paffrath, 1-(866) 960-8649,

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