Private Mortgage Insurance (PMI) is extra insurance that lenders require from most home buyers who obtain loans that are more than 80 percent of their new home's value. In other words, buyers with less than a 20 percent down payment are normally required to pay Private Mortgage Insurance.

Under HPA (The Home Owner's Protection Act of 1998), you have the right to request cancellation of Private Mortgage Insurance when you pay down your mortgage to the point that it equals 80 percent of the original purchase price or appraised value of your home at the time the loan was obtained, whichever is less. You also need a good payment history, meaning that you have not been 30 days late with your mortgage payment within one year of your request, or 60 days late within two years of your request. Your lender may require evidence that the value of the property has not declined below its original value and that the property does not have a second mortgage, such as a home equity loan.

Under HPA, mortgage lenders or servicers must automatically cancel Private Mortgage Insurance (PMI) coverage on most loans, once you pay down your mortgage to 78 percent of the value if you are current on your loan. If the loan is deliquent on the date of automatic termination, the lender must terminate the coverage as soon thereafter as the loan becomes current. Lenders must terminate the coverage within 30 days of cancellation or the automatic termination date, and are not permitted to require PMI premiums after this date. Any unearned premiums must be returned to you within 45 days of the cancellation or termination date.

For high risk loans, mortgage lenders or servicers are required to automatically cancel Private Mortgage Insurance (PMI) coverage once the mortgage is paid down to 77 percent of the original value of the property, provided you are current on your loan.

If you are not eligible for Cancellation or Automatic Termination as outlined above, Forced Termination may be an option for you. Forced Termination occurs in one of two ways:

All loans against the property are completely refinanced and the mortgage is redone without any Private Mortgage Insurance (PMI).

A smaller, 2^nd Mortgage only is done to pay down the 1^st Mortgage to 78 percent. This causes an Automatic Termination by the 1^st lien holder.

Your inLoan Mortgage Specialist can introduce you to a wide variety of single loans with no Private Mortgage Insurance.

Another option is the "Piggy-Back" option, where a 1^st lien at 80 percent LTV (Loan to Value) is done with an accompanying 2^nd lien for the remaining 5%, 10%, 15% or even 20%. This option is especially attractive to borrowers with little or no funds available for down payment.