Agent

Can high credit score help cancel mortgage insurance?

Borrower questions how lender perceives risk

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DEAR BOB: I have a FICO (Fair Isaac Corp.) credit score of 750 and wonder why I am still paying PMI (private mortgage insurance)? --Jennifer R. DEAR JENNIFER: Congratulations on your superb FICO credit score. However, that has nothing to do with your obligation to pay PMI. Purchase Bob Bruss reports online. When you bought your house or condo, you probably paid little or no cash down payment. Because of your high FICO credit score, your lender approved a high loan-to-value-ratio mortgage. But the lender insisted on PMI to eliminate its high foreclosure loss risk. After you achieve at least 20 percent equity in your house or condo, ask your mortgage lender to cancel your PMI premium, which is then unnecessary to protect the lender's 80 percent or lower mortgage. Until you have at least 20 percent equity, your lender still views you as a high risk, which requires PMI to protect the lender. However, until your home loan has at least 24 months of on-time monthly payments, most mortgage len...