If you purchased your home with less than a twenty (20%) percent down payment, you are probably paying mortgage insurance premiums that are relatively substantial. As a general proposition, once your loan to value ratio drops below eighty (80%) percent, you are usually able to terminate those insurance payments. Thus, it is important for you to keep an eye on the outstanding principal balance of your loan, as it is lowered by virtue of your loan’s amortization.
If you contrast that figure with the fair market value of your home, which probably appreciated since you purchased it, you may be eligible to eliminate that mortgage guaranty insurance. In fact, depending upon your financial circumstance, if you are in a situation where this insurance premium is being paid each month and you have some additional income that you can apply to your mortgage principal, you might be able to accelerate the time when you can to stop making these payments. This would be an overall benefit to your cash flow and quality of life.
By: Bruce M. Fogel, Esquire
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