Cancel Mortgage Insurance Easily Request Letter Guide

Understanding Mortgage Insurance Cancellation

Mortgage insurance is a type of insurance policy that protects lenders in case borrowers default on their mortgage payments. However, once a borrower has paid down a significant portion of their mortgage, they may be eligible to cancel their mortgage insurance. This is where a request letter for mortgage insurance cancellation comes into play.

A request letter for mortgage insurance cancellation is a formal letter sent to the lender or mortgage servicer requesting the cancellation of mortgage insurance. In this article, we will provide a comprehensive guide on how to write a request letter for mortgage insurance cancellation, including examples, tips, and best practices.

Benefits of Canceling Mortgage Insurance

Canceling mortgage insurance can have several benefits for homeowners. For one, it can help reduce monthly mortgage payments, which can free up more money in the budget for other expenses. Additionally, canceling mortgage insurance can also help homeowners avoid paying unnecessary premiums, which can add up over time.

According to Consumer Financial Protection Bureau (CFPB), mortgage insurance cancellation can also help homeowners build equity in their homes faster. This is because mortgage insurance is typically required for borrowers who put down less than 20% of the purchase price as a down payment.

When to Request Mortgage Insurance Cancellation

There are several scenarios when a homeowner may be eligible to request mortgage insurance cancellation. These include:

• When the loan balance falls below 80% of the original purchase price
• When the loan balance falls below 80% of the current market value of the property
• When the homeowner has made significant payments on the mortgage

In any of these cases, the homeowner can submit a request letter for mortgage insurance cancellation to their lender or mortgage servicer.

How to Write a Request Letter for Mortgage Insurance Cancellation

Writing a request letter for mortgage insurance cancellation can seem daunting, but it’s a relatively straightforward process. Here are some tips to keep in mind:

• Use a formal business letter format
• Include the homeowner’s name, address, and loan number
• State the reason for the request (e.g., loan balance below 80% of original purchase price)
• Provide supporting documentation (e.g., loan statement, appraisal report)
• Specify the date the homeowner wants the cancellation to take effect

Here’s an example of a request letter for mortgage insurance cancellation:

[Homeowner's Name]
[Homeowner's Address]
[City, State, ZIP]
[Email Address]
[Phone Number]
[Date]

[Lender's Name]
[Lender's Address]
[City, State, ZIP]

Dear [Lender's Representative],

Re: Request for Mortgage Insurance Cancellation

I am writing to request the cancellation of mortgage insurance on my loan account # [Loan Number]. As of [Date], my loan balance has fallen below 80% of the original purchase price of my property.

I have attached a copy of my loan statement and appraisal report to support my request. I would like to request that the mortgage insurance be canceled effective [Date].

Thank you for your prompt attention to this matter.

Sincerely,

[Homeowner's Name]

Tips for Getting Your Request Approved

Here are some additional tips to increase the chances of getting your request letter for mortgage insurance cancellation approved:

• Make sure to include all required documentation
• Double-check the loan balance and property value
• Be polite and professional in your communication
• Follow up with a phone call or email if you don’t receive a response

Common Mistakes to Avoid

When submitting a request letter for mortgage insurance cancellation, there are several common mistakes to avoid:

• Not including required documentation
• Providing incorrect loan information
• Not specifying the date of cancellation
• Being unprofessional or rude in communication

Conclusion

In conclusion, canceling mortgage insurance can be a great way for homeowners to save money and build equity in their homes. By following the tips and guidelines outlined in this article, homeowners can increase their chances of getting their request letter for mortgage insurance cancellation approved.

Remember to always use a professional and polite tone when communicating with your lender or mortgage servicer. With the right approach, homeowners can successfully cancel their mortgage insurance and enjoy the benefits that come with it.