Then the borrower must request that the policy be cancelled in writing to the lender and that lender will consider the borrower's request. However, some lenders and investors will require MI coverage until even lower LTVs are reached, or until the loan is paid off. Others, on the other hand, may be more lax and only require one year of on-time payments. Because loans are routinely bought and sold on the secondary market, it is impossible to guarantee anything. Lenders remember the disastrous decline in property values during the late 1980s and are more careful about being protected.
Mortgage insurance is a critical element of the American dream.
With a little bit of information and planning, decisions can be made that are appropriate to an individual borrower's financial position and future plans.