Do You Know How Mortgage Insurance Can Be Cancelled?Federated Lending Corporation

Do You Know How Mortgage Insurance Can Be Cancelled?

If you did not put down at least 20% on your home purchase, more than likely, you were required to purchase mortgage insurance. Mortgage insurance is sometimes called Private Mortgage Insurance (PMI) or in the case of Government FHA loans, Mortgage Insurance Premium (MIP). Mortgage insurance guarantees the lender against any losses should you default. Most times, a foreclosure event costs the lender at least 20% of the value of a home by the time the property is foreclosed and resold. Mortgage insurance covers the lender for losses incurred so depositors or investors don’t lose their principal.

Mortgage Insurance typically adds .2% to 2.0% of the original loan balance per year. If you put down 5%, you can typically expect to pay .88% per year in addition to your current interest rate. In Bucks County, the average $280,000 mortgage loan would pay FHA $205 per month in FHA MIP.

Your lender is happy to have their loans insured and sleeps well at night. You, on the other hand, may be paying for insurance you don’t need. Your lender or servicer will not track you down and tell you that you may be able to eliminate your mortgage insurance and save money. So, how do can you get it canceled?

There are a few considerations depending on your specific loan:

Since 2013, FHA loans with less than 10% down have Mortgage insurance for life. It will never be canceled and the only way is a refinance.
If you have a non-FHA loan, Federal law requires the automatic cancelation of mortgage insurance when you reach 78% of the homes original value per the original payment schedule.
You can pay the balance down to 80% of the original value or get an appraisal proving so. There are some fine print and it varies by servicer. Some services require an appraisal, minimum of 2 years paid Mortgage insurance , all payments on time, etc. You have to contact each servicer and request their PMI termination procedures. Servicers enjoy their sleep knowing you are paying for their insurance, and don’t make the process easy.
You can always refinance.

If you are paying Mortgage Insurance, you should call us right now. We can do a free evaluation and possibly lower your interest rate and eliminate your mortgage insurance. Give us a call at 215-493-1500 or drop by our office. There is no cost or obligation and any loan officer will be glad to help.

Testimonials

Mike Pawlikowski

Federated Lending comes through again

Federated Lending comes through again. Tom K. and Federated Lending team helped me through the process of getting my original mortgage and now again with the refinance. They made the process very easy and I am extremely happy with the end result. I would strongly recommend if your looking for a mortgage or refinance that you reach out to the Federated Lending Team.

Megan Detwiler

Pleased with our experience

We were happy with our experience. Initially there was a step missed that caused a slight delay, but we couldn’t be upset because it ended up getting us a lower rate overall. We were able to sign the documents in the comfort of our own home which was super convenient and appreciated. Would recommend!

Jorge Figueroa

Federated Lending Is Fantastic and Honest

This was such an easy transaction. What is probably the most stressful thing to do Andy and his Team made this absolutely seamless. Everything was done perfectly and right on time. Zero issues at the closing table and it all went exactly as it was explained. I was prepared for so many things to be a push up and there was none of it. NONE! I cannot say enough ...

Patrick Mallon

Federated Lending has great customer…

Federated Lending has great customer service, a very knowledgeable staff, and made re-financing an effortless experience.

Katie Novak

Federated Lending was a great mortgage…

Federated Lending was a great mortgage company to work with! We were able to ask questions and get immediate answers.

Elaine Punchello

I've trusted Federated Lending multiple…

I've trusted Federated Lending multiple times for my home mortgages. They make what can be a difficult process easy to get through. I've never had a delay in a settlement because of my mortgage, which is a frequent issue with other lenders. I'll continue to use them and recommend them. Thanks!

Kristen Katzianer

Easy process from start to finish

Easy process from start to finish. The underwriter should make more money.

Jacob Desperak

Wonderful and easy experience!

My wife and I had a very good experience with Fedlend thanks to Andy and Kathy. We couldn’t be more thankful for all the help and guidance we received along the way. Would definitely recommend to all home buyers, as we will use Fedlend for our next purchase or refinance.

Shawn Cannon

Second time working with Vince

Second time working with Vince. Have had nothing but great experiences. Highly recommend!!

Bart Cerami

Thanks Andy!!

Andrew Larson and Federated Lending made refinancing my home simple, and saved me a lot of money in the process. And Andy continued to assist me after the closing when I had a question regarding my local tax payment. I have already recommended him to several of my friends and will continue to do so. Thanks Andy!!

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