19. Save $40-$100 per month – Get rid of private mortgage insurance if you have 20% of built-up home equity
If your down payment was less than 20%, you are probably paying PMI. Once you have a 20% cushion through reducing your debt and home appreciation (yes, prices do go up from time to time), contact your mortgage company to start the process of removing the PMI.
Private mortgage insurance, by contrast, might cost as much as 1% of the loan balance per year.
This can be a savings of $40 per month!
Also, getting FHA insurance rather than PMI is much cheaper too, if you get a new mortgage. Thus, if you have to have mortgage insurance, FHA mortgage insurance can be the lesser of two evils.
See if you can cancel the PMI (Private Mortgage Insurance ) on your mortgage. Lenders are required to do this, but they only cancel the PMI based on the numbers they had at the time of the loan. If the value of your home has gone up, you may be able to cancel your PMI payments early. The formula is that you must have a loan balance that is, at most, 80% of your home's current appraised value.
If you know your home has greatly appreciated in value, get an appraisal. Use your home's appreciated value to petition the lender to cancel PMI.
Get rid of PMI ASAP. Private mortgage insurance (PMI) is normally required if you have less than 20% equity in your home. And it can easily cost $50 a month! As soon as you're sure you've got the magic 20%, whether its by appreciation or paying off mortgage principal, call your lender and tell them you want out of PMI. Expect them to make you jump through hoops since they make tons of money from this coverage.
Insure your house. Make certain you purchase enough house insurance coverage to replace the house and its contents. “Replacement” on the house means rebuilding to its current condition.
