Make Private Mortgage Insurance a Thing of the Past

Although lenders have been legally obligated (for loans closed past July 1999) to cancel Private Mortgage Insurance (PMI) when the mortgage balance goes under 78% of the purchase price, they do not have to cancel PMI automatically if the equity is more than 22%. (The law does not apply to some higher risk mortgages.) But if your equity reaches 20% (no matter what the original price was), you have the right to cancel your PMI (for a mortgage that past July 1999).

Verify the numbers

Keep track of your principal payments. Also be aware of what other homes are selling for in your neighborhood. Unfortunately, if yours is a new mortgage loan - five years or fewer, you likely haven't had a chance to pay very much of the principal: you have been paying mostly interest.

Verify Eligibility

Once your equity has risen to the magic number of twenty percent, you are close to stopping your PMI payments, once and for all. Call your lender to ask for cancellation of PMI. Your lender will request documentation that your equity is at 20 percent or above. You can acquire proof of your equity by getting a state certified appraisal using form URAR-1004 (Uniform Residential Appraisal Report), required by most lending institutions before canceling PMI.

Homewithloan.com can answer questions about PMI and many others. Give us a call: 9727982110.

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