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How to get rid of your student loans without paying #interest #rates #on #car #loans


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How to get rid of your student loans without paying

Students hoping to become public defenders, work in the health field, or hopeful veterinarians in the state of Kentucky specializing in large food animals — you’re in luck.

You might be eligible for a number of programs that will help to repay your student loan debt. (Problem is, these programs aren’t easy to find out about.)

“The information can be really buried within a website or can be fractured,” said Betsy Mayotte, director of regulatory compliance at the nonprofit organization American Student Assistance. “You kind of have to dig for the details.”

With the interest rate on new subsidized Stafford loans doubling from 3.4 percent to 6.8 percent on July 1, 2013, students taking on debt to pay for their graduate degrees might consider researching the different programs out there. To help guide students interested in forgiveness programs, ASA has put together an eBook called “60+ Ways To Get Rid Of Your Student Loans (Without Paying Them). ” The organization divides the programs into two broad categories.

“Forgiveness programs are generally programs where you are rewarded for something that you do. Generally it’s some sort or volunteer or a specific working profession where there’s a need for people to work in that profession,” said Mayotte. “Unfortunately, discharge is for when something bad happens to you.”

The loan forgiveness and discharge programs were instituted by the federal government (as well as some state governments, organizations and private businesses) to eliminate all or part of a student’s loans if he or she qualifies. Borrowers who give back to their community, work in fields or areas of need, or face unpredicted, extenuating circumstances are eligible for these different programs.

To apply for forgiveness, you may need proof that you’ve worked for the required number of years at the location or profession that makes you eligible for the program.

The types of loan forgiveness programs available can be divided among these broad categories:

  • Community service

One community service option is applying for an AmeriCorps. award. It repays part of a person’s student loans based on their service in the AmeriCorps program. The U.S. federal government program is meant to engage adults in intensive community service work with the goal of “helping others and meeting critical needs in the community.” Other volunteer organizations offering loan forgiveness include the Peace Corps. and Volunteers in Service to America (VISTA ).

  • Military
    Perhaps one of the most well-known ways to forgive your student debt. Generally there are two types of programs — ones that pay for school while you’re in school and then programs relating to existing loan forgiveness. You should speak with a recruiter about the different plans out there. Find out more information at Military.com .
  • Profession
    The most common professions eligible for loan forgiveness tend to be in the health and teaching fields. Mayotte says some states are really thirsty for nurses, doctors, teachers, or public defenders — and may have forgiveness programs to attract those types of workers. You can find more career-based forgiveness programs with an online search or by talking to your employer. Find out more information at FinAid.org .
  • State specific

    You may be eligible for a program in a particular state if you are a legal resident in that state, work in one of the selected jobs, have a license for one of the jobs in the state, or went to school there. Search online to see what programs are available to you. Go to the state’s website and search around. State specific programs can change or be eliminated based on budget, so keep an eye out.

For more advice on dealing with your student loans check out these links:

The types of loan discharge options include:

  • Closed schools/school errors

Borrowers may be eligible if their school closed while they were attending or within 90 days of leaving it. They may also be eligible if they withdrew from school and were not refunded the correct amount. Borrowers are only eligible if they received their loans on or after January 1, 1986.

  • Disaster
    There’s a discharge option for spouses of eligible public servants or other eligible victims who died or became permanently and totally disabled due to physical injuries suffered as a result of the September 11, 2001 attacks.
  • Financial hardship
    Borrowers who face financial hardship based on income or debt could be eligible for these options:
      • Bankruptcy
        Contrary to popular belief, you can get rid of your loans in bankruptcy. But it’s difficult to do so. You must prove to a bankruptcy judge that repaying your loans would be an undue hardship. This standard generally requires you to show that there is no likelihood of any future ability to repay. Learn more .
      • Income-based repayment
        To qualify you must have a partial financial hardship, which means that payments to your eligible loans exceeds 15 percent of your discretionary income. After 25 years — 10 working in public service — any student loan debt left over is forgiven. Learn more .
      • Income-contingent repayment
        Similar to the income-based repayment program, but payments are capped at 20 percent of discretionary income. Learn more .
      • Pay as you earn forgiveness
        Only for newer borrowers. You must be a new Direct Loan borrower as of October 1, 2007, with a disbursement made after October 1, 2011. Any Direct Consolidation loan made on or after October 1, 2011, that does not include a Parent PLUS loan or a loan made prior to October 1, 2007 is eligible. Learn more .
  • Fraud
    If someone fraudulently obtained the loan in your name you may be eligible to have your loan discharged.
  • Medical

    For borrowers who suffer from physical or mental impairments or have died.

Mayotte said it’s important to note that for many of these loan programs, the amount that’s forgiven can be taxed as income.

She says the best way to find out what programs are available to you is searching online and asking.

“Ask a potential employer if student loan repayment is part of a benefit. Ask a school that you’re attending if the school is aware,” says Mayotte. “I wouldn’t be surprised if there were some super secret programs out there that weren’t online.”

Learn more about student loan forgiveness programs — click play on the audio player above to hear the Marketplace Money   interview with Mayotte.


Payday loan consolidation: Helps to get rid of your multiple pdl debts -OVLG #instant #approval #payday #loans


#compare payday loans
#

Payday loan consolidation: Ends multiple pdl debts and saves money

This debt relief option comes in when you’re struggling to pay high-interest pdls even after making your best efforts. Payday loan consolidation program helps you pay off cash advance loans and get control of your finances yet again.

When you should go for it

  • You want to get rid of high APRs
  • You want to save your paycheck from pdl lenders
  • You want to get out of pdl cycle

How does payday loan consolidation work?

Having problems with online and storefront pdls? If yes, then try to consolidate payday loans as soon as possible. But before you make a final decision to consolidate payday loan debt, let’s check out how this process actually works:

Here, a payday loan consolidation company offers a payment plan you can afford. The consolidators work closely with your lenders to bring down the interest rates and possibly waive off all the additional fees and extra charges. Most companies that consolidate payday loans will offer a free counseling where your current financial situation will be evaluated properly. This will help you get a payment plan, which is affordable.

How much do you have to pay every month?


Loan Defaults– Getting Rid of Debt when Defaulting on Your Loans #consolidating #loans


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Defaulting on Your Loans

Defaulting on a loan means that you have not met your obligations when it comes to the terms of repayment. It can mean missing a payment, being late on a payment or avoiding a payment altogether. A default on any loan is going to severely damage your credit score and leave you vulnerable to one or more collection procedures.

The consequences of default depend on whether your loan is secured (mortgage or car loan) or unsecured (credit card, student loans or personal loans).

Defaulting on Secured Loans

If you default on a home equity loan or a home equity line of credit. the lender can foreclose on your house. While the process varies from state to state, you will usually be in default on this type of loan after 150 days of nonpayment.  Although foreclosure normally takes 2 to 18 months after you default, some foreclosures can take two years or more.

Similarly, if you default on your automobile loan, your car can be repossessed — which means the bank takes ownership of it. Most banks will first issue a notice to a client in default, allowing for a designated time period — usually around seven days — in which you can make good on your payment. If you cannot meet the deadline or renegotiate your loan terms, your lender can petition a court for a permit to repossess your vehicle.

If your car is taken, it will likely be put up for resale at a public auction. You can keep your car from being auctioned off by redeeming your debt — or paying the total amount due, plus any fees associated with the repossession. If the car sells for less than the amount you owed, you may be liable to make up the difference.

Defaulting on Unsecured Loans

In the case of unsecured loans, there is no collateral (property) that can be taken. Generally you have a grace period of up to 30 days to pay on a credit card or other personal loan, but in some cases missing a payment by even one day can cost you.

After 60 days of nonpayment on a typical credit card account. you will be facing late fees and perhaps an interest rate increase. By 90 days, you will likely come to the attention of the lender’s collection department, which will move your account to default status.

Between 120 and 180 days, your debt will probably be charged off — which means your bank will count it as a loss and delete the account from its books. You will still owe the money, and the bank will either sell the account to a collection agency or hire a debt collector who will receive a percentage of the collected amount.

Once your debt has been charged off, you have opened yourself up to the pursuit of a collector who has a financial stake in getting you to pay and a great deal of experience in pressuring defaulters to meet their obligations. While the federal Fair Debt Collection Practices Act (FDCPA) prevents a collector from employing certain abusive and deceptive practices in attempting to reclaim a loan, you cannot escape the annoyance and aggravation that a professional debt collector can generate.

Sooner or later, a charge-off will reach a lawyer’s desk, and a collection attorney may take you to court after issuing a final letter calling upon you to pay your debt. If the debt is deemed valid, the court can issue a judgment against you, ordering you to pay it — and legal fees.  Once you go to court, your default becomes a matter of public record.

A court judgment allows a creditor to put a lien on your house, which means that if you ever sell it you’ll be forced to cover over some or all of that debt. A lender or collector can also ask a judge for an execution order, which allows it to garnish up to 25 percent of your wages.

In addition, your original creditor will undoubtedly report the default to the credit bureaus, and your debt will be labeled as an unpaid charge-off on your credit report. This will remain on your credit report as evidence that you once had difficulties in meeting your financial obligations. (A delinquent debt that is paid before it reaches charge-off status should not negatively impact your credit report.)

Defaulting on Other Debts

Some debts stay with you for life, even if you file for bankruptcy. These include child support, alimony, student loans, and debts due on federal or state taxes.

Among these types of debts, IRS debts are probably the easiest to re-negotiate, as the government isn’t as likely to intimidate you to get your attention. It can simply redirect any tax refunds owed you straight into the Treasury.

Defaulting on child support, on the other hand, can result in criminal charges and jail time.

Student loan default generally occurs after 270 days of nonpayment. Since there is no statute of limitations on federal student loans, your obligation to repay them never goes away.

The consequences of defaulting on a student loan can include:
  • Ineligibility for additional federal aid or grants.
  • Severe damage to your credit report.
  • Garnishment of wages.
  • Seizure of savings and checking accounts.
  • Cancellation, revocation or non-renewal of a professional license.
  • Withholding of state and federal tax refunds.

How to get rid of your student loans without paying #cash #loans


#how to get a loan
#

How to get rid of your student loans without paying

Students hoping to become public defenders, work in the health field, or hopeful veterinarians in the state of Kentucky specializing in large food animals — you’re in luck.

You might be eligible for a number of programs that will help to repay your student loan debt. (Problem is, these programs aren’t easy to find out about.)

“The information can be really buried within a website or can be fractured,” said Betsy Mayotte, director of regulatory compliance at the nonprofit organization American Student Assistance. “You kind of have to dig for the details.”

With the interest rate on new subsidized Stafford loans doubling from 3.4 percent to 6.8 percent on July 1, 2013, students taking on debt to pay for their graduate degrees might consider researching the different programs out there. To help guide students interested in forgiveness programs, ASA has put together an eBook called “60+ Ways To Get Rid Of Your Student Loans (Without Paying Them). ” The organization divides the programs into two broad categories.

“Forgiveness programs are generally programs where you are rewarded for something that you do. Generally it’s some sort or volunteer or a specific working profession where there’s a need for people to work in that profession,” said Mayotte. “Unfortunately, discharge is for when something bad happens to you.”

The loan forgiveness and discharge programs were instituted by the federal government (as well as some state governments, organizations and private businesses) to eliminate all or part of a student’s loans if he or she qualifies. Borrowers who give back to their community, work in fields or areas of need, or face unpredicted, extenuating circumstances are eligible for these different programs.

To apply for forgiveness, you may need proof that you’ve worked for the required number of years at the location or profession that makes you eligible for the program.

The types of loan forgiveness programs available can be divided among these broad categories:

  • Community service

One community service option is applying for an AmeriCorps. award. It repays part of a person’s student loans based on their service in the AmeriCorps program. The U.S. federal government program is meant to engage adults in intensive community service work with the goal of “helping others and meeting critical needs in the community.” Other volunteer organizations offering loan forgiveness include the Peace Corps. and Volunteers in Service to America (VISTA ).

  • Military
    Perhaps one of the most well-known ways to forgive your student debt. Generally there are two types of programs — ones that pay for school while you’re in school and then programs relating to existing loan forgiveness. You should speak with a recruiter about the different plans out there. Find out more information at Military.com .
  • Profession
    The most common professions eligible for loan forgiveness tend to be in the health and teaching fields. Mayotte says some states are really thirsty for nurses, doctors, teachers, or public defenders — and may have forgiveness programs to attract those types of workers. You can find more career-based forgiveness programs with an online search or by talking to your employer. Find out more information at FinAid.org .
  • State specific

    You may be eligible for a program in a particular state if you are a legal resident in that state, work in one of the selected jobs, have a license for one of the jobs in the state, or went to school there. Search online to see what programs are available to you. Go to the state’s website and search around. State specific programs can change or be eliminated based on budget, so keep an eye out.

For more advice on dealing with your student loans check out these links:

The types of loan discharge options include:

  • Closed schools/school errors

Borrowers may be eligible if their school closed while they were attending or within 90 days of leaving it. They may also be eligible if they withdrew from school and were not refunded the correct amount. Borrowers are only eligible if they received their loans on or after January 1, 1986.

  • Disaster
    There’s a discharge option for spouses of eligible public servants or other eligible victims who died or became permanently and totally disabled due to physical injuries suffered as a result of the September 11, 2001 attacks.
  • Financial hardship
    Borrowers who face financial hardship based on income or debt could be eligible for these options:
      • Bankruptcy
        Contrary to popular belief, you can get rid of your loans in bankruptcy. But it’s difficult to do so. You must prove to a bankruptcy judge that repaying your loans would be an undue hardship. This standard generally requires you to show that there is no likelihood of any future ability to repay. Learn more .
      • Income-based repayment
        To qualify you must have a partial financial hardship, which means that payments to your eligible loans exceeds 15 percent of your discretionary income. After 25 years — 10 working in public service — any student loan debt left over is forgiven. Learn more .
      • Income-contingent repayment
        Similar to the income-based repayment program, but payments are capped at 20 percent of discretionary income. Learn more .
      • Pay as you earn forgiveness
        Only for newer borrowers. You must be a new Direct Loan borrower as of October 1, 2007, with a disbursement made after October 1, 2011. Any Direct Consolidation loan made on or after October 1, 2011, that does not include a Parent PLUS loan or a loan made prior to October 1, 2007 is eligible. Learn more .
  • Fraud
    If someone fraudulently obtained the loan in your name you may be eligible to have your loan discharged.
  • Medical

    For borrowers who suffer from physical or mental impairments or have died.

Mayotte said it’s important to note that for many of these loan programs, the amount that’s forgiven can be taxed as income.

She says the best way to find out what programs are available to you is searching online and asking.

“Ask a potential employer if student loan repayment is part of a benefit. Ask a school that you’re attending if the school is aware,” says Mayotte. “I wouldn’t be surprised if there were some super secret programs out there that weren’t online.”

Learn more about student loan forgiveness programs — click play on the audio player above to hear the Marketplace Money   interview with Mayotte.


Get Rid of Student Loan Debt Without Paying for It – US News #pensioner #loans


#help with student loan debt
#

Get Rid of Student Loan Debt Without Paying for It

Loan forgiveness programs can help ease borrowers’ college debt burden, if they work in certain areas.

Sixty percent of 2012 college graduates went into debt to finance their bachelor’s degrees. borrowing an average of $26,500, according to an annual report released last week by the College Board. Students who pursue a master’s or professional degree often add tens of thousands of dollars to that tab.

Graduates may be able to legally bypass some student loan payments, thanks to loan forgiveness programs. I was able to use AmeriCorps to repay some of my loans and had all of my Perkins loans forgiven, Tori Whaley told U.S. News via Facebook, referring to the national volunteer program.

Doctors, nurses, teachers and even librarians can benefit from state and federal initiatives, which typically help graduates pay a portion of their loans if they agree to work in high-need areas for a set number of years. These areas often include rural communities, as well as schools and medical clinics serving low-income families and underserved minority groups such as Native Americans.

60+ Ways To Get Rid of Your Student Loans (Without Paying Them) , an e-book from American Student Assistance, a nonprofit that helps students manage college loan debt, catalogs many of the programs available.

Certain loan forgiveness programs may only be available to graduates who borrowed loans after a certain date, says Whaley, who earned a master’s in special education from the Peabody College of Education and Human Development at Vanderbilt University in 2009.

I started school and took out my first loan in 1996. So, despite working for 7 years as a special education teacher in low income communities, I was not able to receive that benefit, she wrote.

Health care professionals may be well versed in forgiveness programs such as the National Health Service Corps and the NURSE Corps, for example, but other niche programs exist to help medical professionals ease their loan burden.

Licensed dentists, psychiatrists and doctors specializing in general medicine, geriatrics or family medicine can qualify for up to $40,000 in loan forgiveness through the Indian Health Service Loan Repayment Program .

Graduates must commit to work for a minimum of two years at a practice serving American Indian and Native Alaskan communities in order to receive the funds, according to the U.S. Department of Health and Human Services.

States such as Alaska, California, Georgia and Kansas also offer loan forgiveness options for medical professionals. Most of these programs require graduates work in underserved areas, such as rural communities.

Doctors committed to healing four-legged patients can get help with their student loans, too.

Nathan Glaza, a veterinarian in northern Kentucky, receives $3,000 every six months to put toward his nearly $135,000 in student debt, thanks to the Kentucky Large/Food Animal Veterinary Incentive Program.

Slim job prospects for large animal vets at existing clinics prompted the Kentucky native to move home and start his own practice after graduating from the Auburn College of Veterinary Medicine. With student loan payments of $1,300 a month, every little bit helps, he says.

It helps that I know there’s a little bit of leeway there that I can pay off the loan debt, or knock them down a little bit, then focus on something else, he says. Either getting a house over my head, or buying some equipment that will help out in whatever cases I’m seeing and help provide better medicine around here.

Kentucky’s program pays up to $18,000 toward outstanding student loans for veterinarians who work with large animals or those bred for food, such as cattle, pigs and sheep. Veterinary technicians who graduate from a two-year program may also apply for the incentive. Preference is given to state residents, according to the program’s website, but new graduates who want to work in the state can also apply.

Minnesota has a similar program for graduates of the College of Veterinary Medicine at the University of Minnesota. Graduates must work for five years in rural areas designated by the state. As with many programs, limited funds are available, so graduates must apply for the loan forgiveness.


How to get rid of your student loans without paying #i #need #a #loan


#how to get a loan
#

How to get rid of your student loans without paying

Students hoping to become public defenders, work in the health field, or hopeful veterinarians in the state of Kentucky specializing in large food animals — you’re in luck.

You might be eligible for a number of programs that will help to repay your student loan debt. (Problem is, these programs aren’t easy to find out about.)

“The information can be really buried within a website or can be fractured,” said Betsy Mayotte, director of regulatory compliance at the nonprofit organization American Student Assistance. “You kind of have to dig for the details.”

With the interest rate on new subsidized Stafford loans doubling from 3.4 percent to 6.8 percent on July 1, 2013, students taking on debt to pay for their graduate degrees might consider researching the different programs out there. To help guide students interested in forgiveness programs, ASA has put together an eBook called “60+ Ways To Get Rid Of Your Student Loans (Without Paying Them). ” The organization divides the programs into two broad categories.

“Forgiveness programs are generally programs where you are rewarded for something that you do. Generally it’s some sort or volunteer or a specific working profession where there’s a need for people to work in that profession,” said Mayotte. “Unfortunately, discharge is for when something bad happens to you.”

The loan forgiveness and discharge programs were instituted by the federal government (as well as some state governments, organizations and private businesses) to eliminate all or part of a student’s loans if he or she qualifies. Borrowers who give back to their community, work in fields or areas of need, or face unpredicted, extenuating circumstances are eligible for these different programs.

To apply for forgiveness, you may need proof that you’ve worked for the required number of years at the location or profession that makes you eligible for the program.

The types of loan forgiveness programs available can be divided among these broad categories:

  • Community service

One community service option is applying for an AmeriCorps. award. It repays part of a person’s student loans based on their service in the AmeriCorps program. The U.S. federal government program is meant to engage adults in intensive community service work with the goal of “helping others and meeting critical needs in the community.” Other volunteer organizations offering loan forgiveness include the Peace Corps. and Volunteers in Service to America (VISTA ).

  • Military
    Perhaps one of the most well-known ways to forgive your student debt. Generally there are two types of programs — ones that pay for school while you’re in school and then programs relating to existing loan forgiveness. You should speak with a recruiter about the different plans out there. Find out more information at Military.com .
  • Profession
    The most common professions eligible for loan forgiveness tend to be in the health and teaching fields. Mayotte says some states are really thirsty for nurses, doctors, teachers, or public defenders — and may have forgiveness programs to attract those types of workers. You can find more career-based forgiveness programs with an online search or by talking to your employer. Find out more information at FinAid.org .
  • State specific

    You may be eligible for a program in a particular state if you are a legal resident in that state, work in one of the selected jobs, have a license for one of the jobs in the state, or went to school there. Search online to see what programs are available to you. Go to the state’s website and search around. State specific programs can change or be eliminated based on budget, so keep an eye out.

For more advice on dealing with your student loans check out these links:

The types of loan discharge options include:

  • Closed schools/school errors

Borrowers may be eligible if their school closed while they were attending or within 90 days of leaving it. They may also be eligible if they withdrew from school and were not refunded the correct amount. Borrowers are only eligible if they received their loans on or after January 1, 1986.

  • Disaster
    There’s a discharge option for spouses of eligible public servants or other eligible victims who died or became permanently and totally disabled due to physical injuries suffered as a result of the September 11, 2001 attacks.
  • Financial hardship
    Borrowers who face financial hardship based on income or debt could be eligible for these options:
      • Bankruptcy
        Contrary to popular belief, you can get rid of your loans in bankruptcy. But it’s difficult to do so. You must prove to a bankruptcy judge that repaying your loans would be an undue hardship. This standard generally requires you to show that there is no likelihood of any future ability to repay. Learn more .
      • Income-based repayment
        To qualify you must have a partial financial hardship, which means that payments to your eligible loans exceeds 15 percent of your discretionary income. After 25 years — 10 working in public service — any student loan debt left over is forgiven. Learn more .
      • Income-contingent repayment
        Similar to the income-based repayment program, but payments are capped at 20 percent of discretionary income. Learn more .
      • Pay as you earn forgiveness
        Only for newer borrowers. You must be a new Direct Loan borrower as of October 1, 2007, with a disbursement made after October 1, 2011. Any Direct Consolidation loan made on or after October 1, 2011, that does not include a Parent PLUS loan or a loan made prior to October 1, 2007 is eligible. Learn more .
  • Fraud
    If someone fraudulently obtained the loan in your name you may be eligible to have your loan discharged.
  • Medical

    For borrowers who suffer from physical or mental impairments or have died.

Mayotte said it’s important to note that for many of these loan programs, the amount that’s forgiven can be taxed as income.

She says the best way to find out what programs are available to you is searching online and asking.

“Ask a potential employer if student loan repayment is part of a benefit. Ask a school that you’re attending if the school is aware,” says Mayotte. “I wouldn’t be surprised if there were some super secret programs out there that weren’t online.”

Learn more about student loan forgiveness programs — click play on the audio player above to hear the Marketplace Money   interview with Mayotte.


Mortgage Insurance: When You Can Get Rid Of It #interest #rate #on #car #loan


#loan insurance
#

Mortgage Insurance: When You Can Get Rid Of It

Growing up, I would play Monopoly about once a week. Mr. Monopoly seemed to have all the money in the world, even if it was just in the form of colored paper.

Sadly, the overwhelming majority of us do not grow up to be Mr. Monopoly. We may do well, but we won’t be buying islands in the Bahamas any time soon.

Because we don’t lie on a vast throne of gold and gems, many of us don’t have a 20% down payment when it comes time to buy a house. The good news is you can still make the purchase. You just have to pay mortgage insurance.

Mortgage insurance is helpful in the sense that it gives you a lot more buying power. It can also be annoying, because it’s an additional item tacked on your mortgage payment every month.

The goal of this post is to give you some clarity around if and when you can get rid of your mortgage insurance. In some cases, it even goes away on its own.

First, we’ll go over some factors affecting whether you can get rid of your mortgage insurance and when you can do it. After that, we’ll look at how these factors interact with each other in practice to help you determine whether or not you can say “hasta la vista, baby!” to your mortgage insurance.

Factors Affecting Your Mortgage Insurance Removal

There are six factors that affect whether your mortgage insurance can be removed: the type of mortgage insurance involved, who holds your loan, the loan-to-value (LTV) ratio, the property type, the age of the loan and whether or not your property value has increased.

Types of Mortgage Insurance

Before we go any further, there are two types of mortgage insurance to define: private mortgage insurance and mortgage insurance premiums.

If you pay mortgage insurance on a monthly basis on conventional loans, that’s called private mortgage insurance (PMI).

You pay mortgage insurance premiums (MIP) on FHA loans. You pay a portion of the premium upfront at the close of the loan and then continue to make payments on a monthly basis.

This post focuses on both PMI and MIP, in order to see whether you can eliminate your monthly payments.

Who Holds Your Loan?

The next thing you need to know is who’s invested in your loan. Fannie Mae and Freddie Mac have different policies regarding when mortgage insurance can be eliminated. Depending on the age of your loan and the amount of your down payment, MIP may or may not be removable from FHA loans.

If you don’t know whether your conventional loan is held by Fannie Mae or Freddie Mac, you can use their lookup tools. Here’s one for Fannie and one for Freddie .

Loan-to-Value (LTV) Ratio

Maybe the most important aspect of whether your mortgage insurance can be canceled is your loan-to-value (LTV) ratio. Put simply, your LTV measures the amount of equity you’ve built up in your home. The number signified by the ratio is the percentage of your home value you still have to pay off.

For example, if you’ve paid off 20% of your home value between the down payment and monthly installments, your current LTV would be 80%.

Your LTV also goes down as your property value goes up because it’s based on your property value, not the loan amount.

Property Type

The requirements for removing PMI also vary depending on the type of property you have. We’ll get into specifics later on. For right now, the important thing to know is that removing mortgage insurance on a one-unit primary or vacation home is easier than taking it off multi-unit primary properties or investment homes.

Age of the Loan

In some instances, the age of the loan is a determining factor in whether mortgage insurance can be removed. This especially comes into play when trying to remove FHA MIP. It also sometimes makes a difference when you’re trying to remove PMI due to a gain in equity caused by an increase in your property value.

Property Improvements

If you’ve made substantial property improvements that cause increases to the value of your home, you’ll need to get a new appraisal to substantiate the improvements. Depending on the age of your loan, it may also change the amount of equity needed to remove the mortgage insurance.

Now that we know the factors that affect whether or not your mortgage insurance is eligible to be canceled, let’s see how these things interact with some real-world examples.

Canceling MIP

MIP cancellation is the easiest scenario to take a look at. Unfortunately, the reason for this is that it can’t be canceled in many cases.

If your loan closed on or after June 3, 2013 and you had a down payment of less than 10%, MIP will never be removed. With down payments of 10% or more, you still have to pay MIP for 11 years.

If your loan closed before that date, things are a little better. On a 15-year term, MIP is canceled when your LTV reaches 78%. For longer terms, the LTV requirement remains the same, and you have to pay MIP for at least five years.

Conventional PMI

Conventional loans are the most flexible type of loan, allowing borrowers to purchase the greatest range of properties. However, this variety means there are a lot of variables that come into play in determining when mortgage insurance can be canceled.

One-Unit Primary Residence or Vacation Home

If the residence is your single-family primary home or second home, your mortgage insurance will be canceled automatically in either of the following scenarios, whichever happens first:

  • The LTV reaches 78% (and you didn’t make extra payments to get it there)
  • You reach the midpoint of your mortgage term (15 years on a 30-year mortgage, for example)

To give these numbers some context, if you had a 10% down payment at a rate of 4.0%, you’ll reach 78% LTV after 81 months. The same scenario with a 5% down payment would take 104 months. The auto cancellation occurs as long as you’re current on your payments.

If you don’t want to wait for it to auto cancel, you have some options. If your LTV reaches 80% through payments, you can request cancellation.

Fannie Mae allows you to make extra payments on the balance in order to get down to 80% faster, while Freddie Mac doesn’t.

If you’ve made home improvements to increase your equity by increasing your property value, Fannie Mae requires that you have 75% or less LTV before they will take off mortgage insurance. Freddie Mac leaves the requirement at 80%. All improvements have to be called out specifically in a new appraisal.

If you’re requesting removal of your PMI based on natural increases in your property value between two and five years after your loan closes, both Fannie Mae and Freddie Mac require a new appraisal, and the LTV has to be 75% or less. If your removal request comes more than five years after your closing, the LTV can be 80% or less with a new appraisal. These requirements apply to insurance removal based on market value increases not related to home improvements.

Multi-Unit Primary Residence or Investment Property

If you have a multi-unit primary residence or investment property, things are a bit different. With Fannie Mae, mortgage insurance cancels halfway through the loan term on its own. Freddie Mac does not auto-cancel mortgage insurance.

You can cancel PMI on your own when LTV reaches 70% based on the original appraisal with Fannie Mae. Freddie Mac requires 65% for cancellation.

The requirements for Fannie and Freddie are the same if you want to have a new appraisal done to show a lower LTV. This is true whether the lowered LTV is based on a natural market-based increase in home value or home improvements. Please keep in mind that you must have had the loan for at least two years prior to requesting PMI removal on your investment property.

Note on Cancellation

There are a couple things to know about mortgage insurance cancellation. In order for mortgage insurance to auto-cancel, you have to be current on your payments. If you want to request a cancellation yourself, you can’t have had a 30-day late payment in the last year. You also can’t have had payments more than 60 days late in the last two years.

Help Sheet

I realize I just threw a ton of information and random numbers at you. In order to better help you figure out which situation applies to your loan, we’ve put together a sheet that should help you out.

To begin with, here are the requirements to remove PMI from conventional loans. Click the images below to enlarge.

There are some stipulations regarding how and when PMI can be removed.

FHA loans have very specific requirements for when MIP can be removed.

Hopefully this post has helped make more sense out of your mortgage insurance. Still have questions? Ask in the comments below!