Great way to lower your mortgage!!
For all my fellow House hackers. Did you know you can pay off your PMI early and not need to pay it in your monthly payments??... Let's jump into how to do it! First, I wanted to pay it forward and share my personal story. Again, it's one of the cheapest ways to lower your mortgage and save money over the life of your loan!!
When I house hacked my first rental property I asked my lender if I could pay off my PMI in one lump sum vs paying it over the period of the loan. Now most of us know that after 20%-22% (depending on your lender) your PMI drops off but seems like not everyone knows you can pay your PMI in one lump sum!!
I paid a little over $5,000 to pay off my PMI in one sum vs paying it every month until the loans value reached 20%. With the amortization I ended up saving over $10,000 using this small tweak!!! If you have the cash, up front, to pay the PMI in one lump sum it could save you big time and help your cashflow!
Now, not all lenders allow for this to happen so be sure to ask before deciding on a lender. Hopefully this helps my fellow house hackers!!! Please upvote if you feel this will help out!!
Very true and something most don't realize!
And the 20% is also loan-to-value which many don't know as well, so after doing remodeling or the market going up you can request it to fall off earlier than it would if you didn't request it.
For example, if I bought a house for 100K and put 5% down one a conventional loan, I can request the PMI to be removed if the value of the home goes up to 125K in value. This requires no refinancing and they may only request you pay for an appraisal to confirm.
Quote from @Trenton Engle:
Very true and something most don't realize!
And the 20% is also loan-to-value which many don't know as well, so after doing remodeling or the market going up you can request it to fall off earlier than it would if you didn't request it.
For example, if I bought a house for 100K and put 5% down one a conventional loan, I can request the PMI to be removed if the value of the home goes up to 125K in value. This requires no refinancing and they may only request you pay for an appraisal to confirm.
Very true!
