A borrower obtained a conventional loan with 15% down payment on July 1, 2020. The loan has a 30-year amortization schedule. Due to property appreciation, the current LTV is 75%. The borrower has made all payments on time. When can the borrower first request PMI cancellation based on the original property value?
Correct Answer
A) July 1, 2022
Under the HPA, borrowers can request PMI cancellation based on the original property value when the principal balance is scheduled to reach 80% of the original property value AND they have been current on payments for the preceding 12 months. However, they must wait at least 2 years from the loan origination date before making such a request.
Why This Is the Correct Answer
Under the HPA, borrowers can request PMI cancellation based on the original property value when the principal balance is scheduled to reach 80% of the original property value AND they have been current on payments for the preceding 12 months. However, they must wait at least 2 years from the loan origination date before making such a request.
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