Private mortgage insurance (PMI) protects the lender if the borrower stops making payments on a loan. Lenders require consumers to purchase PMI on a Conventional loan if their down payment is less than 20 percent of the sales price or the appraised value of the home. The Homeowners Protection Act of 1998 was passed by Congress to address borrowers’ difficulties in cancelling PMI when they had reached a certain level of equity in the property. Below are the ways in which PMI on a Conventional loan can be terminated:
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