Private mortgage insurance are the group of private insurance companies protects the mortgage lender from loss in the event of having to foreclose on your mortgage or if you have 20% equity in a home are you still required to pay mortgage insurance .
There are some specific percentages where private mortgage insurance is no longer required. If you have 20% equity in a home or more of the house value, you will not still required to pay mortgage insurance.
The need to pay private mortgage insurance depends upon the percentages of the equity left with or percentage of equity you hold in the house. The term home equity is means the variation between the present market value of the residence, and the amount of borrowings on that house.
At this point wherever there is chance for you try to keep away from paying private mortgage insurance. If your equity in your home is more than 20% of the present market value, or if you have 20% equity in a home are you still required to pay mortgage insurance? Then you should immediately contact with the private mortgage insurance to cancel your private mortgage insurance policy.
If you have 20% equity in a home or more of the house value, you will not still required to pay mortgage insurance, this can be explained by an example, suppose if you have 20% equity in a home are you still required to pay mortgage insurance? No not at all because if you have purchased a house in New Jersey in 1998 for $140,000 and you put a down payment of $12,000, which equaled 8.57% equity. Because of the this low percentage of equity you would be required to pay Private Mortgage Insurance that could range from $60 – $250 per month.
You know in New Jersey, property prices increased about 15% in the year 2000-2001 and about 8% the last year. The home you purchase for $140,000 now has a market worth of about $169,000, but you will be obliged only the original $140,000 you borrowed, you now has home equity of $29,000 equal’s about 20.71%. For the reason that your home equity now go beyond 20% you should be able to terminate your private mortgage insurance and keep that premium of $60 -$250 every month.
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