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Cancelling mortgage insurance is typically permitted by lenders and investors after the homeowner has built up enough equity in the home.
The Homeowners Protection Act of 1998 (HPA)1 covers single-family primary residences whose sales were closed on or after July 29, 1999. HPA provides for borrower-requested cancellation and lender-required cancellation.
Borrower-requested cancellation under HPA
The borrower must provide the lender a written request for mortgage insurance cancellation. Upon receiving the request, the lender must cancel the mortgage insurance policy either:
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.
Mortgage insurance coverage can be cancelled only if:
Lender-required cancellation under HPA
The lender must automatically cancel the mortgage insurance policy either:
Different cancellation requirements apply to loans designated at origination as "high risk."
Individual investors establish the criteria for cancelling mortgage insurance based on a property's current value. HPA does not address mortgage insurance cancellation using current value. Fannie Mae and Freddie Mac typically require3:
Check other investors' mortgage insurance cancellation requirements.
Borrowers must request mortgage insurance cancellation in writing and provide a current value estimate acceptable to their lender.
Borrowers should contact their lender to cancel their mortgage insurance coverage. Lenders and loan servicers should contact us. Request cancellation within 30 days after the date mortgage insurance is no longer required via:
MGIC/Link Servicing — Select Cancel Coverage in the main menu
New to the mortgage business or looking to refresh your MI knowledge?
Cancellation of Insurance form
Sign up for direct deposit (ACH) premium refunds
Homeowner Protection Act brochure
How Mortgage Insurance Works (lender version)
When and how to cancel MGIC mortgage insurance brochure (for lenders)