How To Cancel Mortgage Insurance

Yuma AZ

The Homeowners Protection Act of 1998 (HPA)¹ covers single-family primary residences closed after July 1999. 

HPA provides for borrower-requested cancellation and lender required cancellation.

A borrower provides the lender a written request for mortgage insurance cancellation. Upon receiving the request, the lender must cancel the mortgage insurance policy either: On the date the mortgage loan balance is first scheduled to reach 80% of original value, based on the initial amortization schedule, regardless of the outstanding balance of the loan OR On the date the mortgage loan balance actually reaches 80% of the original value For a purchase transaction, original property value is the lesser of the property sales price and appraised value. For a refinance transaction, original value is the appraised value. only if: No subordinate liens AND The borrower has a good payment history AND The borrower satisfies the lender's requirement that the property value has not declined

Lender-required cancellation under HPA 

Lenders automatically cancel the mortgage insurance policy either: On the date the mortgage loan balance is first scheduled to reach 78% of original value, based solely on the initial amortization schedule, regardless of the outstanding balance of the loan AND If the borrower is current on the payments required by the terms of the mortgage

Excepting "high risk." loans

current value Individual investors establish the criteria for cancelling mortgage insurance based on a property's current value.  the loan be seasoned at least 2 years AND  the borrowers have an acceptable payment history AND  the loan to value  based on a current appraisal be 75% or lower if less than 5 years have elapsed since the loan originally closed OR the loan to value based on a current appraisal be 80% or lower if more than 5 years have elapsed since the loan originally closed

Borrowers must request mortgage insurance cancellation in writing and provide a current value estimate acceptable to their lender. If you need help with cancellation, please contact me CG NMLS 324982   I have some tools for appraisal which might or may not be acceptable to your service company. Remember the lender and servicer are required by law to inform you of your progress annually

Allow me to recap

You must ask in writing 

You can't have 30 and 60 days mortgage late payments in past 24 months

No second trust deed, including solar

You pay for an appraisal, or BPO or whatever form the Servicor asks you to provide.

Hopefully Your loan was not sold to one of the worst rated service companies:

Ocwen Loan Servicing, Carrington Mortgage Services, Cenlar, LoanCare  or Mr. Cooper, SPS

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Lower Mortgage Rates

How do you know when you can lower your loan payments or perhaps even pay your mortgage off sooner?
I hope you know you can always ask me questions like these. Now, I’m sharing an easy way for you to explore options for yourself, too.
With just a few clicks, you can compare a current sample rate to your own plus answer other important questions.
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We update sample rates every weekday, so you can be assured the comparison you’re seeing today is timely. I encourage you to go ahead and bookmark the page to check again anytime in the future.
Finally, if you think any of your friends, co-workers or family members would benefit from a mortgage checkup, please feel free to forward this along. I’ll be happy to help them.
Thank you for your business and for your referrals.

C G Barbeau

(949)  784 - 9699

NMLS 324982

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Refinance

Here are  reasons people refinance their home loan(s):

Rate Reduction - Rates don’t have to move much for a refinance to make sense. We simply need to determine the costs and benefits. The benefits may outweigh the costs…even with a rate drop that as is little as .25%.

Reduce monthly payment - change from 15  to longer terms as plans have changed. 

Removal of Private Mortgage Insurance (PMI) – Some loans require PMI and while most allow the removal of PMI without refinancing, you may be able to get rid of PMI sooner by refinancing. FHA loans originated after June of 2013 do not allow the removal of PMI without refinancing the loan completely.

Consolidation – Do you have a 2nd mortgage/HELOC, credit card debt, car loans, student loans, or even mortgages on other properties that you would like to consolidate? If so, a consolidation refinance may make sense. Student loan interest rates are often higher than mortgage rates

Cash-Out – Are you considering home improvements, starting a new business, or another project/investment in the near future? If so, refinancing and extracting some of your home equity may be a good option to consider.  Perhaps you need funds to send a child to college or care for parents

Life Events such as marriage, or divorce, college or a career change, homeowners often need to make a change in their mortgage which usually results in a refinance.

Change in loan term – Homeowners often find that their financial plans change over the years and in many cases that calls for a refinance. We offer countless loan terms. Whether you’re looking for an adjustable rate loan, an interest only loan, a 15 year fixed, or another program, I can assure you that the options are almost endless.

Count on me for honest guidance. I enjoy hearing from my clients. Call/email me if you or anybody you know would like to discuss a potential refinance scenario.

This spring the flowers are in bloom and it's time to refresh your payment

Call me  949 -  784 -  9699

NMLS 324982

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Why a Living Trust for Mortgage

We allow you to vest your real estate and mortgage in the name of your Living Trust.
You provide the complete trust document to the title officer for review. Vesting this
way has your individual estate plan written out.

 You may, or may not, have a trust in place. If not, I strongly suggest you consider the benefits of a living trust and move title into the name of a trust when/if you have one in place.

What is a living trust and how is it different from a last will

A living trust (sometimes called an "inter vivos" or "revocable" trust) is a written legal document through which your assets are placed into a trust for your benefit during your lifetime and then transferred to designated beneficiaries at your death by your chosen representative, called a "successor trustee."

On the other hand, a will is a written legal document with a plan of distribution of your assets upon your death. Your executor, as named in the will, oversees this process, and notably, nothing in your will takes effect until after you die.

1. A Living Trust Avoids Probate

One of the first benefits of a living trust is that it avoids probate. With a valid will, your estate will go through probate, the court proceedings through which your assets are distributed according to your wishes by the executor. A living trust, on the other hand, does not go through probate, which often means a faster distribution of assets to your heirs—from months or years with a will down to weeks with a living trust. Your successor trustee will pay your debts and distribute your assets according to your instructions. Notably, both documents allow you to choose a guardian for your children in the event of your death.

2. A Living Trust May Save You Money

Remember this really all depends on your financial situation. At first, drafting a living trust will likely cost more than drafting a will as it is a more complex legal document. Moreover, you must also transfer your assets such as bank accounts, stocks, and bond accounts and certificates to the trust through separate paperwork; simply writing up a living trust does not actually "fund the trust."

Other procedures involved in an estate plan with a living trust could also include changing the beneficiary on your life insurance policy to the trust, appropriately dealing with your IRA or 401(k) plan, and also creating a "pour-over will" that will provide for the distribution of any assets acquired after the creation of the living trust but before your death or any assets inadvertently excluded.

Note that the pour-over will, just like any will, will have to go through probate.

While a will costs less to draft, a living trust can save your estate money at the time of your death as the distribution of assets in the trust will not go through probate; court costs for probating your will are taken from estate, although note that for a simple, uncontested will, costs are often nominal.

Regarding contests, living trusts will likely hold up better in the event that someone comes forward contesting the distribution of your assets; accordingly, court costs to cover any will contests may also need to be considered.

As far as savings of income and estate taxes, there is often no substantial difference between living trusts and wills, although living trusts may provide savings for married couples in the form of joint living trusts.

Note that for people with simple estate plans and for young married couples with no children or significant assets, a living trust is probably not financially beneficial.

3. A Living Trust Provides Privacy

One big difference between the two legal documents is the level of privacy offered with a living trust. As a living trust is not made public, upon your death, your estate will be distributed in private. A will, on the other hand, is public record and so all transactions will be public as well.

Another difference is the handling of out-of-state property you own upon your death. With a will, that property will have to go through probate in its own state; a living trust can help you avoid probate.

What other benefits does a living trust provide?

Beyond the top three main benefits, another benefit is that a living trust is written so that your trustee can automatically jump into the driver's seat if you become ill or incapacitated.

On the other hand, if you simply have a will without a durable power of attorney, the court will appoint someone to oversee your financial affairs who will have to report to the court for approval of expenses, sales of property, etc. One widely reported public example of this is the conservator-ship of Britney Spears' father over his daughter's financial affairs.

Note that if you draw up a durable power of attorney, including one for health care decisions, you can avoid a court-appointed conservator for your affairs.

With a living trust, however, your handpicked successor trustee can manage your affairs without court intervention, and since the trust is revocable, if you dispute your incapacity, you can retain control yourself.

While a living trust makes sense for some people, wills are just fine for others. A general rule among tax planners is that the larger the value of the estate, the greater need there is for a living trust—although even this is not foolproof.

Are you interested in setting up a living trust, but not sure where to start, or who to go to? I would be more than happy to refer you to a trust attorney.