• Facebook
  • Instagram
  • Twitter
  • LinkedIn
  • Mail
  • Schedule Call Now
Call Now (619) 934-7775
Mortgage Heroes | Be the Hero of Your Neighborhood
  • Home
  • Loans
  • Resources
  • About Us
  • Contact
  • Apply Now
  • Menu

Removing Mortgage Insurance

Removing your Mortgage Insurance can save you hundreds a month and thousands per year.

By this time, it is well known that the real estate and mortgage markets went on an absolute tear since 2020. Home price appreciation has been at its all-time high during an unbelievably short period of time. Additionally, mortgage rates plummeted and made borrowing money very affordable for millions of households across the country. Even with great migrations to and from some of our most popular states, and a steep increase of cash offers and high down payments, we still saw hundreds of thousands of people use low down payment conventional purchase programs, and FHA purchase programs in order to buy their first home. With these low down payment programs comes mortgage insurance.

“Mortgage insurance lowers the risk to the lender of making a loan to you, so you can qualify for a loan that you might not otherwise be able to get.”

https://www.consumerfinance.gov/ask-cfpb/what-is-mortgage-insurance-and-how-does-it-work-en-1953/

The bottom line is this, every month you make your mortgage insurance payment, that is money you could be saving if you were able to refinance your property today and eliminate that feature. Provided you have 20% equity or more you could be eligible to do a rate and term refinance or cash out refinance in order to eliminate your monthly mortgage insurance. With the majority of the country experiencing double digit home price gains over the last 2 years it is highly likely your home qualifies. (Remember, equity is the gap between your current loan amount and your property value. Therefore, the longer ago you purchased, the more mortgage payments you have made, thus decreasing your current loan balance – at the same time values have sky rocketed…a doubling effect in your favor.)

At first glance you might think that $100 or $200 a month may not mean very much to your budget, however overtime look at how much money you could be saving by taking the proper action on this today. And if your monthly mortgage insurance is higher than the amounts illustrated below, the monthly, annual, and long term savings are even greater!

As you see in the chart below both of these scenarios we recently financed have mortgage insurance. Look at the collective total amount paid just in the first five years of ownership. Historical refinance data shows that a majority of homeowners refinance or move within five to seven years so it is realistic for you to see what five years of paying mortgage insurance might look like and whether or not you are going to be satisfied while knowing you could do something about it right now.

Monthly Mortgage

Insurance Payment

Annual cost of

Mortgage Insurance

5 year cost of

Mortgage Insurance

$90 $1,080 $5,040
$125 $1,500 $7,500
$210 $2,520 $12,600

*Illustration represents current monthly, annual, and 5-year cost of mortgage insurance,

which when removed is money saved by the borrower(s).

(Recent closing statement for a Conventional Fixed Rate Purchase Loan with monthly mortgage insurance)

Removing your mortgage insurance without refinancing can take several years, and your bank is unlikely to be proactive about when you can and should do this. Typically, when your loan balance is 78% of your original balance, your mortgage insurance can be removed. However, if you have 20% home equity right now and you refinance, you will not even need mortgage insurance. If you purchased a home anytime since 2017 and still have mortgage insurance, you are a prime candidate to have that mortgage insurance removed with a rate and term refinance or cash out refinance.

The decision to remove your mortgage insurance seems like a pretty simple decision, but what about the rate environment?

This is a key factor to determining how you want your homeownership experience to look over the long term. If you are that family that plants themselves in a place for 5 or more years at a time then the decision to remove your mortgage insurance may be less of a rate sensitive decision since you are planning your monthly money on a longer time horizon. In an increasing rate environment, it is better to secure the lowest rate possible now vs. an increased rate down the line. And since you are removing your mortgage insurance, that money you are saving every month can be directed at any other financial objective you have in store for yourselves.

Whether you are making a short term or long-term decision, it is worth exploring the removal of your mortgage insurance. Your local mortgage expert can help you ascertain what mortgage decision is right for you given your goals and current mortgage outlook.

Schedule a Call Today to Discuss Your Home Loan Needs!

Schedule Your Call Today!

Share this entry
  • Share on Facebook
  • Share on Twitter
  • Share on WhatsApp
  • Share on Pinterest
  • Share on LinkedIn
  • Share on Tumblr
  • Share on Vk
  • Share on Reddit
  • Share by Mail

CONTACT US DIRECTLY

If you would like to speak with our team about your home loan questions, please complete the form below. You can also start your loan application online by APPLYING NOW.

  • This field is for validation purposes and should be left unchanged.

Rates & Fees Disclosure:
‡ The payment on a $300,000 30-year fixed-rate VA loan at 3.000% with a 80% loan-to-value ratio is $1,292.01 with 0 (zero) origination points due at closing. The annual percentage rate (APR) is 3.235%. Payment does not include tax and insurance premium impounds. The actual payment amount will be greater. By refinancing your existing loan, the total finance charges may be higher over the life of the loan. Some state and county maximum loan amount restrictions may apply. Appraisal fee of $600, Processing Fee of $895, Underwriting Fee of $795 included in APR calculations with borrower paying 0 (zero) loan origination points.

‡ Based on Mortgage Heroes internal data.

RECENT POSTS

  • Monday Mortgage Minute – The Fed is up to batJanuary 30, 2023 - 5:37 pm
  • Monday Mortgage Minute – Uh oh the Empire State Manufacturing Index was super bad!January 23, 2023 - 7:48 pm
  • Monday Mortgage Minute – What the Fed Said, PPI, Existing Home Sales & Homebuilder IndexJanuary 17, 2023 - 1:51 am
  • Monday Mortgage Minute – Jobs data conflict and Jerome Powell speaks this week!January 10, 2023 - 6:18 am
  • Monday Mortgage Minute – WE HAVE A NEW SHOW FORMAT!January 2, 2023 - 9:55 pm

Follow us on Facebook

WE GOT YOUR SIX!

Mortgage Heroes has been helping Active Military and Veterans for more than 15+ years. This page is made to help all military families get the answers they are looking for when it comes to housing. Whether its questions about using your VA or new listings in SD, Mortgage Heroes are here to support just as each military member has supported this country!

GET IN TOUCH

Mortgage Heroes
873 Anchorage Place
Chula Vista, California 91914
group@yourmortgageheroes.com
(619) 934-7775
NMLS# 325149
See NMLS consumer access page

© Copyright - Mortgage Heroes | Locations | Privacy Policy | Disclosures & Licenses | Blog
  • Facebook
  • Instagram
  • Twitter
  • LinkedIn
  • Mail
Cash Out Refinance- Is There Wind in Our Sails? Attention San Diego Homeowners
Scroll to top

This site uses cookies. By continuing to browse the site, you are agreeing to our use of cookies.

AcceptDo Not AcceptSettings

Cookie and Privacy Settings



How we use cookies

We may request cookies to be set on your device. We use cookies to let us know when you visit our websites, how you interact with us, to enrich your user experience, and to customize your relationship with our website.

Click on the different category headings to find out more. You can also change some of your preferences. Note that blocking some types of cookies may impact your experience on our websites and the services we are able to offer.

Essential Website Cookies

These cookies are strictly necessary to provide you with services available through our website and to use some of its features.

Because these cookies are strictly necessary to deliver the website, refuseing them will have impact how our site functions. You always can block or delete cookies by changing your browser settings and force blocking all cookies on this website. But this will always prompt you to accept/refuse cookies when revisiting our site.

We fully respect if you want to refuse cookies but to avoid asking you again and again kindly allow us to store a cookie for that. You are free to opt out any time or opt in for other cookies to get a better experience. If you refuse cookies we will remove all set cookies in our domain.

We provide you with a list of stored cookies on your computer in our domain so you can check what we stored. Due to security reasons we are not able to show or modify cookies from other domains. You can check these in your browser security settings.

Other external services

We also use different external services like Google Webfonts, Google Maps, and external Video providers. Since these providers may collect personal data like your IP address we allow you to block them here. Please be aware that this might heavily reduce the functionality and appearance of our site. Changes will take effect once you reload the page.

Google Webfont Settings:

Google Map Settings:

Google reCaptcha Settings:

Vimeo and Youtube video embeds:

Privacy Policy

You can read about our cookies and privacy settings in detail on our Privacy Policy Page.

Privacy Policy
Accept settingsHide notification only