Expert: Denise Monaco - 10/29/2009

Question
It is my understanding that PMI is supposed to be automatically cancelled when you LTV reaches 78%.  We are being told by CitiMortgage that they will not cancel our PMI even though our LTV is at about 75%.  We paid extra principle payments to reach the lower LTV and CitiMortgage is stating that they are not obligated because we haven’t reached the date that our loan was ‘suppose’ to be at 78% LTV according to our original amortization.  My question is, can they do this?  Can they really keep making us pay PMI because we chose to pay our principle down early?  Is the PMI cancellation really based on an amortization date and not really on your true LTV?

Thanks.


Answer
They are supposed to cancel the PMI automatically when it reaches 78% however with the industry the way it is the guidelines are constantly changing.  I would contact them and see what their new procedure is, you may need to provide an appraisal showing that your home has reached that LTV.  The reason is that property values are going down and you home may not be worth what it was when you purchased it.


Good luck and let me know if you need anything else.

Denise