Mortgage insurance protects your lender from any kind of default by you. You will be the one to pay all these premiums to the insurance company and the only benefit you have from all this is the ability to get a home with less than 20% deposit on the down payment. There are many ways of not paying this PMI on your home loans. You are required to get 20% equity on your home before any lender removes PMI from your payments. In other words, your LTV ratio needs to be less than 80%.
You can do this by increasing the value of your property. The market is always changing and sometimes the value of your property may increase because of the markets. Sometimes, you may have to increase the value of your property yourself by remodeling it. Anything that will make the value of your home in the market will make a lot of difference for you. You can add patio, improve the lighting etc. any change that is fashionable and appealing to the eye will improve the value of the home. You can then have your home appraised and use this new value to calculate your LTV. For example, if you still owe the bank $60,000 of a loan of $ 65,000 you can increase the value of the home by remodeling, so that an appraisal values the home at $100,000 or so. This means that your LTV will be 60%, which means you will not have to pay any PMI as the value of the LTV is less than 80%
You can have your PMI removed by making payments twice a month. This way, you will have reduced the time required to make the mortgage payment and the overall time required to get 20% equity on your home. You can make these payments every two weeks or even every week, so long as you are able to manage all the payments. When this is done, you can remove PMI faster.
The other means of removing PMI is having your interests increased in exchange for the removal of PMI. You can do this at the beginning of the loan so that you gain maximum benefits from this. In sense, you will not have to pay more to the bank compared to someone who will have to pay PMI rates to the bank until he gets the 20% equity on his home.
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