What is mortgage insurance?
Mortgage insurance allows homeowners to purchase their home with less money for their down payment and realize homeownership sooner. It protects lenders against loss if a homeowner defaults on their mortgage.
If you have a conventional loan, this is called Private Mortgage Insurance (PMI):
- PMI is needed for certain loan types and is required when the homebuyer pays less than a required 20% down payment.
- PMI should not be confused with homeowners insurance.
If you have an FHA loan, this is called Mortgage Insurance Premium (MIP):
- MIP is only paid on qualified Federal Housing Administration (FHA) loans.
- MIP is paid directly to the Department of Housing and Urban Development (HUD).
If you have a USDA (U.S. Department of Agriculture) guaranteed loan with a conditional commitment date of October 1, 2011 or later, you will pay a required annual fee for mortgage insurance. The fee will be part of the loan until it is paid off.
PMI, MIP and USDA fees are collected in your mortgage loan payment and should not be confused with other types of insurance such as homeowners, flood or windstorm insurance.
How can I cancel my mortgage insurance?
Private Mortgage Insurance:
- The requirements vary depending on your loan type and applicable state, federal and investor guidelines. Please call us at 1-800-848-9136 or send a written request to the address or fax number below. We’ll send you a letter with the requirements to cancel your PMI.
- If you’ve modified your loan, the date you are eligible to cancel your PMI may have changed.
Mortgage Insurance Premium:
- If your loan was originated before January 1, 2001 or if your loan has a case number assignment date on or after June 3, 2013; HUD does not permit an early waiver of MIP
- If your loan was originated on or after January 1, 2001 and has a case number assignment date prior to June 3, 2013, you may be able to waive MIP from your mortgage payment. Please call us at 1-800-848-9136 or send a written request to the address or fax number below.
You can’t cancel annual fees with the U.S. Department of Agriculture.
How can you reach us?
Mail code LA4-6777
700 Kansas Lane
Monroe, LA 71203
What’s the difference between an appraisal and a Broker Price Opinion for conventional loans?
An appraisal is an interior/exterior evaluation of the property completed by a Chase-approved third-party licensed appraiser. It confirms the current property value.
A Broker Price Opinion (BPO) is an interior/exterior evaluation of the property completed by a real estate agent to confirm the property value. This is used to ensure that the value of the property hasn't declined since the loan closing. You may be eligible for a BPO option if your loan meets an 80% loan-to-original value (LTOV).
Regulatory guidelines don’t allow you to choose your own appraiser or real estate agent. We consider an appraisal or BPO to be valid up to 120 days from the date of inspection.
An appraisal or BPO isn’t available for FHA or USDA loans. Please contact us for more information.
What does LTV mean and what is it used for?
LTV stands for loan-to-value ratio and it’s used to determine your eligibility to cancel your PMI. An LTV ratio is the percentage of the current outstanding balance of your mortgage loan and your home’s original or current value. For example, if your current outstanding balance is $90,000 and your home’s value is $100,000, your LTV is 90%.
What are the LTV requirements to cancel PMI?
For a single-family, owner-occupied residence, you may be able to cancel PMI if:
- Your account is at 80% LTV based on the amortization schedule provided at your loan closing and you’re using the original value of your property. Plus, you’ve not made any 30-day late payments within the past 12 months and any 60-day late payments in the past 24 months.
- If we review the LTV using the current value of your property, you may be eligible to cancel PMI if:
- Your loan is less than two years, your LTV is 75% and you’ve made significant improvements to the property
- Your loan is between two and five years and your LTV is 75% or less
- Your loan is older than five years and the LTV is 80% or less
- You’ve not made any 30-day late payments within the past 12 months and any 60-day late payments in the past 24 months.
For investment properties, you may be eligible to cancel PMI if:
- Your loan is less than two years, your LTV is 65% or less and you’ve made significant improvements to the property.
- Your loan is older than two years, your LTV is 65% or less and there have been no significant improvements.
What are significant home improvements?
Some qualifying examples include additions, extensive remodeling or installing an in-ground pool and a solar panel system. Improvements that don’t qualify include interior/exterior painting, landscaping and other cosmetic work. An appraiser/agent will determine if significant improvements.
Can the Mortgage Insurance Premium be waived from my mortgage payment?
You may be able to cancel MIP if your loan originated on or after January 1, 2001, and has a case number assignment date before June 3, 2013. Loans with a case number assignment date on or after June 3, 2013 aren’t eligible for an early MIP waiver, which means your premiums will end when your loan reaches its scheduled end date. Please contact us for details.