What is PMI?

Private Mortgage Insurance is required for many types of loans when the borrower’s down payment (or equity – in the case of a refinance) is less than 20% of the property’s value.  The private mortgage insurance protects the lender in the event that the homeowner defaults on the loan.  When the homeowner’s equity exceeds 20%, he is eligible to have the private mortgage insurance removed, but he must initiate the process.  If you have made significant improvements to your property, paid down a portion of your mortgage or realized significant market appreciation on your property (for example – if you live in Los Angeles and bought your property in the late 1990s you probably have realized significant appreciation since the time of purchase), you may be eligible to have your private mortgage insurance removed.  The current market value of your property must be established for your mortgage company to consider removing  your private mortgage insurance.