Mortgage Insurance Protection (MIP): What You Need to Know & How to Remove It!

If you're a homeowner with an FHA loan or a conventional loan with less than a 20% down payment, you're likely paying mortgage insurance protection (MIP) or private mortgage insurance (PMI). While this added cost helps lenders reduce their risk, it can add hundreds of dollars to your monthly mortgage payment. The good news? You may be able to remove it sooner than you think!

What Is Mortgage Insurance Protection (MIP)?

MIP is required on FHA loans and is typically paid for the life of the loan unless you refinance into a conventional loan. For conventional loans, mortgage insurance is called PMI (Private Mortgage Insurance) and can be removed once certain conditions are met.

When Can You Remove MIP or PMI?

If you have a conventional loan, you can request PMI removal once you’ve paid your loan balance down to 80% of the home's original value. However, most lenders automatically remove it at 78% if you remain in good standing.

For FHA loans, removing MIP is trickier. Here’s how it works:

• If you put down 10% or more on an FHA loan, MIP is required for 11 years before it drops off automatically.

• If you put down less than 10%, MIP stays for the life of the loan—unless you refinance into a conventional loan.

  
  

Don’t Wait—Call Your Bank!

Even if you’ve paid down your loan below 25%, banks don’t always remove MIP or PMI automatically. That’s why it’s crucial to contact your lender and request its removal once you qualify. In some cases, they may require a new appraisal to confirm your home’s value, especially if property values have increased.

How to Request PMI Removal

1. Check Your Loan Balance – See if your mortgage balance has reached 80% of the home’s original purchase price (or current appraised value if required).

2. Call Your Lender – Ask them what steps are needed to remove PMI.

3. Request an Appraisal (If Needed) – If your home has appreciated significantly, an appraisal may help speed up the PMI removal process.

4. Submit a Formal Request – Some lenders require a written request or specific forms for PMI removal.

   
   

Final Thoughts

Mortgage insurance protection serves its purpose, but once you’ve built enough equity in your home, you shouldn’t be paying for it any longer than necessary. Stay proactive—monitor your loan balance and call your lender once you reach the 80% threshold. If you're unsure about your eligibility, I’d be happy to help you navigate the process and determine if it's time to remove your mortgage insurance!

Need Help with Your Mortgage or Buying a Home? If you have questions about homeownership, refinancing, or buying your next home, reach out to me today!