As a homeowner, one of the biggest expenses you might have to deal with is mortgage insurance. Mortgage insurance is an insurance policy that protects the lender in case you default on your mortgage payments. While mortgage insurance can be beneficial for some homeowners, it can also be costly and unnecessary for others.
If you’re looking to cancel your mortgage insurance, you’re not alone. Many homeowners are looking for ways to reduce their monthly expenses and canceling mortgage insurance is a great way to do that. In this blog post, we’ll explore what mortgage insurance is, how it works, and how you can cancel it. StreicherTeam is always available to walk you through your options and to point you in the right direction, but here are some tips that you may find helpful.
How can you cancel mortgage insurance?
Canceling mortgage insurance can be a great way to reduce your monthly expenses. However, canceling mortgage insurance is not always straightforward. Here are some steps you can take to cancel your mortgage insurance:
- Review your mortgage agreement
The first step in canceling your mortgage insurance is to review your mortgage agreement. Your mortgage agreement will specify the terms of your mortgage insurance, including when you can cancel it. Make sure you read your mortgage agreement carefully and understand the terms and conditions of your mortgage insurance.
- Determine the value of your home
The next step is to determine the value of your home. If your home has increased in value since you bought it, you may have more equity in your home than you realize. Having more equity in your home can make it easier to cancel your mortgage insurance.
- Contact your lender
Once you’ve reviewed your mortgage agreement and determined the value of your home, contact your lender to discuss canceling your mortgage insurance. Your lender can tell you what steps you need to take to cancel your mortgage insurance. Here you can contact StreicherTeam for a quick consultation, however your more direct resource would be to contact the servicing number on your current mortgage statement.
- Pay down your mortgage
One way to cancel your mortgage insurance is to pay down your mortgage. If you’ve paid down your mortgage to 80% of the original value of your home, you can ask your lender to cancel your mortgage insurance. This is known as automatic termination.
- Refinance your mortgage
Another way to cancel your mortgage insurance is to refinance your mortgage. If you’ve built up equity in your home, you may be able to refinance your mortgage and eliminate your mortgage insurance. Refinancing your mortgage can also be a great way to lower your monthly mortgage payments. At StreicherTeam, it is our goal to help you manage this scenario with you.
- Wait for automatic termination
If you can’t cancel your mortgage insurance through automatic termination or refinancing, you may have to wait for automatic termination. Automatic termination occurs when your mortgage balance falls to 78% of the original value of your home. At this point, your lender is required to cancel your mortgage insurance. Remember, this is not true for FHA Loans. Maintain a good payment history, meaning you’ve had no 30 day late payments during the 12-month period before the date your mortgage reaches the cancelation date.
Conclusion
Mortgage insurance can be a costly expense for homeowners, but there are ways to cancel it. By reviewing your mortgage agreement, determining the value of your home, and contacting your lender, this may be a great way to save money on your monthly mortgage payments. With a little bit of effort, you can potentially save hundreds or even thousands of dollars over the life of your mortgage. StreicherTeam is here to help you navigate through this process at any time.