Do you find yourself paying extra for Private Mortgage Insurance (PMI) each month? The good news is that you may be able to cancel it and save hundreds, if not thousands, of dollars annually. But how do you go about doing so without any hassle or confusion? This is where a template letter to cancel PMI comes in handy.
By using a template letter, you don’t have to worry about the language or structure of the letter. Instead, you can find examples that have been tried and tested, edit them as you see fit, and send them off to your lender. It’s that easy!
Furthermore, canceling your PMI can lead to financial freedom and a sense of security in your budget. With a few simple steps, you can lower your monthly mortgage payments and free up extra cash for your own personal needs.
So what are you waiting for? Use a template letter to cancel PMI today and take control of your finances like never before. Your wallet will thank you.
The Best Structure for a Template Letter to Cancel PMI
If you’re a homeowner who is paying for private mortgage insurance (PMI), you might be interested in canceling it. PMI can add a significant monthly expense to your mortgage payment, which can be a burden over time. However, canceling PMI requires a bit of effort, including writing a letter to your lender requesting its removal. Here’s the best structure for a template letter to cancel PMI.
Opening paragraph:
The opening paragraph of your letter should explain that you’re writing to request the cancellation of your PMI. It should include your name, the property address, and your loan number. Be sure to state that your loan was originated on or after July 29, 1999, or that you’ve made enough payments to bring your loan balance down to 80% of the original value.
Body paragraph:
The body of your letter should explain why you believe you’ve met the requirements for PMI cancellation. It should include information about your loan-to-value ratio (LTV) and any other factors that may be considered. For example, if you’ve made extra payments, had a recent appraisal, or made improvements to your home, you should include that information. You should also reference the Homeowners Protection Act (HPA), which requires lenders to remove PMI under certain circumstances.
Closing paragraph:
The closing paragraph of your letter should reiterate your request for PMI cancellation and ask for a response from the lender. Be sure to include your contact information, including your phone number and email address, in case the lender needs to contact you for more information.
Conclusion:
Canceling PMI can be a significant financial benefit for homeowners. Writing a letter to your lender can be a bit intimidating, but the structure outlined above can help you craft a strong and effective message. By explaining why you’ve met the necessary requirements and referencing the HPA, you can make a compelling case for PMI cancellation. Keep your letter concise and focused, and be sure to follow up with your lender if you don’t hear back within a reasonable amount of time.
Sample PMI Cancellation Letter Templates
Cancelling PMI due to Increased Equity in Property
Dear [Lender/Company Name],
I would like to request the cancellation of my Private Mortgage Insurance (PMI) because I have paid down the mortgage to less than 80% of the original purchase price. After conducting a recent appraisal on my property, I have discovered that the equity in my home has substantially increased, to the extent that my outstanding balance has fallen below 80% of the property value.
Therefore, I am requesting that the PMI be cancelled effective immediately. Please provide me with written confirmation of the cancellation and any instructions I need to follow in order to make this happen.
Thank you for your attention to this matter, and I look forward to hearing back from you soon.
Sincerely,
[Your Name]
Cancelling PMI due to Loan-to-value Ratio
Dear [Lender/Company Name],
I am writing to request the cancellation of my Private Mortgage Insurance (PMI) due to the following reason: I have paid down the mortgage to less than 80% of the original purchase price, and the loan-to-value ratio has fallen to an acceptable level.
Accordingly, I am requesting that the PMI be cancelled effective immediately. Please provide me with written confirmation of the cancellation and any instructions I need to follow in order to make this happen.
Thank you for your attention to this matter, and I look forward to hearing back from you soon.
Sincerely,
[Your Name]
Cancelling PMI after 5 years of On-time Payments
Dear [Lender/Company Name],
I am writing to request that my Private Mortgage Insurance (PMI) be cancelled based on my on-time mortgage payments for the last 5 years.
I have a strong payment history and have never missed a payment since I first signed the mortgage contract. As such, I believe that I have been an excellent customer, and my payment history should serve as a solid basis for removing the PMI requirement.
Therefore, I request that the PMI be cancelled effective immediately. Thank you for your attention to this matter and I look forward to hearing back from you soon.
Sincerely,
[Your Name]
Cancelling PMI due to Home Renovations and Increased Property Value
Dear [Lender/Company Name],
I would like to request the cancellation of my Private Mortgage Insurance (PMI) based on the increased value of my property resulting from home renovations.
I recently completed extensive renovations on my home, which included adding an extra bathroom, kitchen updates, and new flooring throughout the house. These renovations have significantly increased the value of my property, and the outstanding loan balance is now less than 80% of the new appraised value.
As such, I am requesting that the PMI be cancelled effective immediately. Please provide me with written confirmation of the cancellation and any instructions I need to follow in order to make this happen.
Thank you for your attention to this matter, and I look forward to hearing back from you soon.
Sincerely,
[Your Name]
Cancelling PMI due to Refinancing at a Lower Rate
Dear [Lender/Company Name],
I am writing to request that my Private Mortgage Insurance (PMI) be cancelled based on my recent refinancing at a lower rate.
I recently refinanced my mortgage and was able to obtain a lower interest rate, which has reduced my monthly payments and the total loan amount. The loan balance is now less than 80% of the new appraised value, and I am confident that I am no longer in need of PMI.
Therefore, I request that the PMI be cancelled effective immediately. Thank you for your attention to this matter and I look forward to hearing back from you soon.
Sincerely,
[Your Name]
Cancelling PMI due to Divorce
Dear [Lender/Company Name],
I am writing to request the cancellation of my Private Mortgage Insurance (PMI) following my divorce.
Since the divorce, I am solely responsible for making the mortgage payment, and I have been able to maintain payments on time consistently. I understand that separating from my spouse may change the equity and value of my property; therefore, I request that the PMI is cancelled immediately.
Thank you for your attention to this matter. Please provide me with written confirmation of the cancellation and any instructions I need to follow in order to make this happen.
Sincerely,
[Your Name]
Cancelling PMI due to Financial Hardship
Dear [Lender/Company Name],
I am writing to request the cancellation of my Private Mortgage Insurance (PMI) based on significant financial hardship.
I have been going through financial trouble and are finding it difficult to keep up with my mortgage payments. Therefore, I am requesting that the PMI be cancelled, and the extra payments are eliminated.
Thank you for your attention to this matter. Please provide me with written confirmation of the cancellation and any instructions I need to follow in order to make this happen.
Sincerely,
[Your Name]
Tips for Writing a Template Letter to Cancel PMI
Private Mortgage Insurance, commonly referred to as PMI, is a type of insurance that is required by lenders when you make a down payment of less than 20% on a home. While PMI can help you qualify for a mortgage, it can also be a costly expense that you’d be better off without. Fortunately, you can cancel PMI once your equity in the home reaches 20%, and writing a letter to your lender is one way to get the process started. Here are some tips for writing a template letter to cancel PMI.
1. Start with a clear and direct introduction. The first paragraph of your letter should clearly state your purpose and the reason why you are writing. Be concise and include all the pertinent information, such as your name, address, and loan account number.
2. Include details about your mortgage. In the second paragraph of your letter, provide specific details about your mortgage, such as the date of the loan closing, the amount of the loan, and the current balance. This information will help the lender identify your account and ensure that you meet the criteria for canceling PMI.
3. Explain how you reached 20% equity. In the third paragraph, explain how you reached the 20% equity threshold that is required to cancel PMI. This could be through making mortgage payments over time, or through an increase in the value of your home due to home improvements or other factors.
4. Request cancellation of PMI. In the fourth paragraph, make a clear request for the cancellation of PMI. State that you believe you meet the criteria for cancellation and that you request that the lender remove the PMI from your mortgage payments. Be sure to include the date that you would like the PMI to be canceled.
5. Offer supporting documentation. In the fifth paragraph, offer any supporting documentation that may help your case for PMI cancellation. This could include an appraisal of your home showing increased value, or records of past mortgage payments that show you have met the 20% equity threshold.
6. End the letter with a thank you. In the final paragraph, thank the lender for their consideration of your request, and express your willingness to provide any additional information that may be needed to complete the process. Sign off with your name and contact information.
By following these tips, you can create a template letter to cancel PMI that is clear, direct, and effective, increasing your chances of a successful outcome.
Frequently Asked Questions (FAQs) about Template Letter to Cancel PMI
What is PMI?
PMI stands for Private Mortgage Insurance. It is an insurance policy that protects the lender or mortgage company in case the borrower defaults on the loan.
When can I request to cancel PMI?
You can request to cancel PMI once you have paid down at least 20% of the original purchase price or appraised value of your home.
Do I need a template letter to cancel PMI?
No, you don’t need a template letter to cancel PMI. However, it can be helpful to have a formal request in writing to ensure that the process is documented properly.
What should the letter include?
The letter should include information about the property, the current mortgage balance, the amount of the original loan, and the date you believe the 20% equity threshold was reached.
Where do I send the letter to cancel PMI?
You should send the letter to the mortgage servicer or lender who is currently servicing your loan.
Is there a timeframe for the lender to respond to my letter?
Yes, the lender is required to respond within 30 days of receiving your request. They may also request additional information or documentation to verify the current value of the property.
What if my request to cancel PMI is denied?
If your request is denied, you can request a new assessment of your property value or consider refinancing your mortgage to eliminate the need for PMI.
Thanks for Reading!
I hope this template letter to cancel PMI has been helpful for those who want to get rid of that extra mortgage payment. Remember to always verify with your lender regarding their requirements and timeline for canceling PMI. If you have any questions or comments, feel free to reach out in the comment section below. And don’t forget to come back for more real-life tips and tricks!