YOU ASK:

Is PMI mortgage insurance given back after the house gets sold?

WE ANSWER:

Typically, no.

The PMI mortgage insurance has already done its job of protecting the loan, thus it has earned the premiums it has charged. This protection is provided for the bank or lending institution, even when you're the one who's paying for the insurance.

So, when the house is sold, the new borrower will be the one who will be required to get new mortgage insurance if the new buyer is not able to meet the 20 percent down payment on the house. However, the premiums you paid will not be refunded to you.

What you can do instead is to have the mortgage insurance coverage cancelled as soon as you meet the requirements for its cancellation. This is while you are paying for your property.

One thing you can do to make sure that the mortgage insurance is cancelled would be to always ensure that you pay your monthly mortgage amortizations on or before the due date. Then, you can demand for a refund from the lender each month for Small Claims. You can also bring this suit to your local Small Claims Court.

An important thing about PMI mortgage insurance that you should know is that although the lender collects the premiums on a monthly basis, it remits the payments to the insurance company on a yearly basis. That is why you can try to get refunds when you have your PMI premium cancelled. This refund can go from several hundred dollars to a few thousands.

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