If You Are Paying PMI Insurance, Is It Time to Refinance?

RefinancingOver the past few years, homeowners have enjoyed deducting private mortgage insurance (pmi insurance) premiums from their income tax. This is also true for government forms of mortgage insurance (aka funding fee or guarantee fee) with FHA, VA and USDA mortgage loans. Effective for 2014 tax returns, this benefit is coming to an end.

If you are currently paying private mortgage insurance and your neighborhood is enjoying appreciating home values, it may be time to contact your local licensed mortgage professional to see if it makes sense to refinance.

If you have a conventional mortgage, you can try contacting your mortgage servicer to see if they are willing to remove your pmi from your mortgage payment. They may require an appraisal (contact them before initiating an appraisal to avoid potentially unnecessary cost) and they may have other requirements. Even if they aren’t willing to remove your pmi, it’s still worth getting a second opinion to see how much you could save refinancing with today’s lower mortgage rates.

If you have an FHA mortgage with more expensive mortgage insurance premiums, this may be a good opportunity to see if it can be refinanced to a conventional mortgage.

So if you’re currently paying private mortgage insurance (pmi) or have an FHA or USDA mortgage, and you’ve been deducting the mortgage insurance premiums from your income tax, it may make more sense than ever to look at refinancing.

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