Home buyers who purchased a home with less than 20% down likely were required by the lender to have Private Mortgage Insurance on your loan often referred to as PMI. This will increase your monthly house payment sometimes by a few hundred dollars a month. The good news is that there are ways to get rid of it. First, it goes away automatically, once you are half way through the mortgage provided you are up to date on your payments, but that could take years.
More likely, one of two other ways are more probable. If your home has appreciated in value in the last five years, which is likely given the escalating real estate markets, you can do one of two things. You can refinance your loan perhaps today at a lower interest rate assuming you now have more equity in the home. Or, you can go to the lender with an appraisal to prove the higher value and request that they remove the PMI from your loan.
First, just Zillow your home to get an idea of its current value. If there has been significant appreciation, which in many cases may have occurred, choose the best option for you. Since it cost money to refinance your loan, unless current mortgage interest rates are 1% or more below what you are paying now and you plan on staying in your home for 5 years or more, the best option may just be to have your current lender remove the PMI if you qualify. PMI can be eliminated. Take the first opportunity to get rid of it to lower your monthly payments.
