According to the Homeowners Protection Act of 1998 (HPA), you can ask your lender to cancel mortgage insurance when your mortgage balance reaches 80% of your home’s original value, either because:
- You’ve made all of your scheduled payments or
- You’ve made extra payments to reduce the principal balance ahead of schedule
In addition to your good payment history:
- Your request must be in writing
- Your property value must be at least the same as its original value and
- There are no subordinate liens on your property
If you meet these requirements, your lender must cancel the mortgage insurance on your loan.
Note: For a purchase transaction, original property value is the lesser of the property sales price and appraised value. For a refinance transaction, original value is the appraised value.