How to Get Rid of PMI Wells Fargo
Learn How to Get Rid of the PMI Wells Fargo: A Comprehensive Guide.
If you have a mortgage with Wells Fargo and are looking to save some money each month, you might be wondering how to get rid of PMI (Private Mortgage Insurance).
Today, we will walk you through the steps to eliminate this extra expense from your mortgage payments. Let’s start by understanding what PMI is and why you should get rid of it.
What is PMI?
PMI stands for Private Mortgage Insurance. It’s an insurance policy that protects the lender in case you default on your mortgage loan. If you’re getting a regular loan and putting down less than 20%, you usually need Private Mortgage Insurance (PMI). So, if you put down less than 20% when you bought your home with Wells Fargo, chances are you’re paying for PMI.
Why Should You Get Rid of PMI?
PMI can be a significant expense, especially in the early years of your mortgage. For example, if you have a $300,000 mortgage with a 10% down payment, you would pay about $1,700 per year in PMI. That’s over $140 per month! Getting rid of PMI can save you money each month and over the life of your loan. It can also make it easier to sell your home in the future.
How to Get Rid of PMI Wells Fargo
Now, let’s dive into the two main methods to get rid of PMI with Wells Fargo.
Method 1: Reach 20% Equity in Your Home
Your equity is the difference between the value of your home and what you owe on your mortgage. When your equity reaches 20%, Wells Fargo is required to automatically cancel your PMI. Here’s how you can achieve this:
- Make Regular Mortgage Payments: Ensure you consistently make your mortgage payments on time.
- Wait for Equity to Reach 20%: As you continue making payments, your equity will naturally increase over time. Keep an eye on your mortgage statement to track your progress.
Method 2: Request PMI Removal Manually
Even if you haven’t reached 20% equity, you may still be able to get rid of PMI by requesting its removal manually. To do this, you’ll need to provide Wells Fargo with an appraisal of your home that demonstrates your home’s increased value.
Here’s what you need to know:
Meet Certain Requirements: To request PMI removal manually, you must meet specific criteria:
- You need to have paid your mortgage every month without being late for the last year (or the past 12 months).
- You must not have had any 60-day or more late payments in the past 24 months.
- Your loan must be current.
- Your home must have increased in value since you purchased it.
Contact Wells Fargo: Call Wells Fargo at 1-800-340-0570 to initiate the PMI removal process. The Rep will ask for:
- Your loan number
- Your contact information
- The date you purchased your home
- The purchase price of your home
- The current appraised value of your home
Wells Fargo will review your request, and if you meet the criteria, they will approve the removal of PMI.
How Long Does It Take to Remove PMI?
If your request for PMI removal is approved, it may take a few weeks for Wells Fargo to process your request. Once approved, your PMI will be removed from your mortgage, resulting in a reduced monthly payment.
Example
You purchased a $300,000 home with a 10% down payment. Your initial mortgage balance would be $270,000. With PMI, your monthly mortgage payment would be around $1,700.
After five years of making on-time mortgage payments, your home has increased in value to $360,000. Your equity is now $90,000, which is 25% of the value of your home.
You can now request PMI removal from Wells Fargo. If your request is approved, your monthly mortgage payment will be reduced to around $1,500. That’s a savings of $200 per month!
Tips for Getting Rid of PMI Wells Fargo
- Make all of your mortgage payments on time without any late payments.
- Keep your loan current by staying up-to-date on payments.
- Ensure your home’s value has increased since your purchase.
- Request PMI removal manually if you don’t have 20% equity but meet the other requirements.
Conclusion
Getting rid of PMI with Wells Fargo can lead to significant monthly savings and long-term financial benefits. Remember, even if you haven’t reached 20% equity, you can still request PMI removal manually if you meet specific criteria.