A PMI (Private Mortgage Insurance) removal calculator is an effective tool that assists you in removing the additional amount that you are paying along with the loan for the house you have purchased.
The additional amount is the amount that is paid to the lender which protects him, in case you stop making payments. PMI is normally arranged by the lender with the help of insurance companies.
If you are lending a conventional loan and you have paid less than twenty percent of the purchased value of the house then in that case PMI is required.
You can discuss the PMI conditions with the lender because he/she is the one in charge and in control of setting an amount.
You can pay the PMI monthly (generally this is the method) or you can pay a large sum in the beginning as a down payment and relax in terms of monthly payments.
Paying a large amount, in the beginning, does not mean you got rid of the monthly payments; rather it means you can pay lower amounts and not burden yourself.
Another interesting point is that you may be able to cancel your PMI if you reach a level of equity in your home. If the amounts are similar or close, you can ask the lender for their cancellation policies.
Some lenders allow you to pay without PMI but that entirely depends on the amount you are paying in the beginning.
The reason why PMI protects the lender and not you is because if you fall behind your payments then you might lose your home but the lender won’t lose the payment. It is his security; not yours.
Now PMI removal calculators are helpful tools as they tell you how long it will take for the property value to become equal to the loan balance so you can terminate the PMI policy.
Generally when your balance reaches 80% of the loan (Loan to Value – LTV) then you can claim to terminate the PMI policy.
In 1998, Homeowner Protection Law (HPA) was made to protect the lenders if any buyer tries to get rid of the monthly payments early.
Until you reach 80% of the payment, the house is not transferred to your name and you certainly cannot own the house.
A variety of best PMI removal calculators are available online for that purpose; with different interfaces and methodologies that are mentioned in this article.
Choosing The Best PMI Removal Calculator
1. Mortgage Professor: PMI Removal Calculator
Mortgage professor’s calculator is a basic free online tool that operates on a simple formula to avoid any complications in the calculations.
Its working and outlook are also basic just like the conventional calculators. It guides people on who should use this calculator or for whom this calculator is the most suitable.
The interface is free of advertisements. Everything is written and displayed in block letters like the conventional calculators. It has a blue and white theme.
All the mandatory tips and points are mentioned above and below the calculator, so users can avoid errors. For calculation, they have to insert all the details for accurate results.
You have to enter the current loan balance, interest rate, monthly payment, number of months since the start of the loan, the property value at the time of the loan, and expected future appreciation rate (per year).
Then click on ‘display loan schedule’ and a detailed schedule will appear in front of you like a report.
This calculator has a full column called ‘mistakes to avoid’ that you can open to read all the dos and don’ts that are necessary to keep in mind while calculating the PMI removal tenure.
This calculator has relatable/relevant articles that you can read for free to take guidance.
But, if you want to read the latest updated articles then you will have to create an account on the calculator by signing up through your email address.
The best part about this calculator is that you can watch tutorials to understand the concept behind PMI, how to use the calculator, what methods to opt for, which formulas to consider, and much more.
The tutorials are prerecorded videos that are available on the calculator as well as on YouTube.
You can follow it on Twitter to get the latest news about new additions to the articles and property rates that change almost daily.
2. Nerd Wallet: PMI Removal Calculator
Nerd wallet’s calculator is an opportune online tool that has a wide variety of options to help you with calculating the PMI removal.
It also provides people with healthy tips and tricks, guidelines, comparison charts, and much more.
The interface is mostly clear as there are just a few advertisements on the side that do not interrupt your calculations.
The overall theme is green and white which is attractive and enhances the general display. It offers users property advisors and experts as well if they are unable to find any appropriate ones.
For calculation, enter the estimated price of the house you are interested to buy, the down payment you can afford, the interest rate, your credit score, and the loan term.
Then click on ‘monthly’ and ‘total’ both amounts will appear in front of you. The site has a navigator installed that helps you find property for sale near you.
Users have to turn on their current location. Once you do that, it will fetch all the information about your nearby area and display the potential lands in front of you.
You can check out the best mortgage lenders of the current year by viewing the list. It has compiled all the renowned lenders together and formed a list.
This is helpful as it lets you see if any lender is from your vicinity or not. And if yes, you can contact that lender and proceed with the process.
You can read similar/relevant articles enlisted on the right side of the calculator.
The articles help you with understanding the process of mortgage insurance, its terms and conditions, how to calculate mortgage insurance, and much more.
The articles are up-to-date and provide you with the latest information.
This calculator has a comparison chart/table that has all the mortgage insurance (PMI) percentages for the current year. You can check the rates and compare them with other lenders.
This will give you an idea of whether your lender is giving you a reasonable rate or not.
This calculator is available for download on your smartphone via the Google play store and Apple store. You can download it through any store depending on the smartphone you own.
3. Omni: PMI Removal Calculator
Omni’s calculator is a well-known calculator that is famous for delivering authentic and accurate results. This calculator was created by Oghenekaro Elem, in 2006.
It has a vast variety of options that you can select and convert this calculator into that form. The interface is mostly clear because the advertisements are on the right side.
The cookies also pop up in the beginning but once you cancel them out, they do not appear again. It has a blue and white theme that is simple and clear.
For calculation, you have to enter the home price, down payment, down payment percentage, mortgage loan, and PMI rate.
Once you enter all the mentioned requirements, the results automatically appear in the box below.
It provides users with the loan-to-value (LTV) ratio, estimated annual PMI, and estimated monthly PMI.
This calculator also acts as an article because it has all the information you need for starting the process and how to interpret and comprehend the process.
Users will find detailed guidelines mentioned on the right side of the calculator in great detail.
You will find formulas that are used for calculating the PMI manually. A proper procedure is explained in detailed steps. You can recheck your results by manually calculating the PMI.
You can follow all the steps and you will get the required answer. Users can study the advantages of PMI that are mentioned at the bottom of the calculator.
There’s also the option read Omni’s calculator blog to check out the comments and feedback of previous and current users.
If you are searching for an online job (work from home), then this calculator is perfect for you.
If you are a finance expert and want to work from home, then you can apply by submitting the form.
If you get selected, you will receive the confirmation through your email. You can follow this calculator on social media; Twitter and Facebook.
You can also subscribe to its YouTube channel to watch prerecorded videos of how to use the calculator and learn about the process.
Some of the best PMI removal calculators are mentioned above with reviews; you can try out all of them and choose any one that suits you the best.