Goodbye, PMI!

While lending institutions have been legally required (for loans closed past July '99) to cancel Private Mortgage Insurance (PMI) at the time the balance gets under 78% of the price of purchase, they do not have to take similar action if the loan's equity is above 22%. (A number of "higher risk" loans are not included.) But you can actually cancel PMI yourself (for mortgages made after July 1999) at the point your equity gets to 20 percent, no matter the original price of purchase.

Do your homework

Keep a running total of each principal payment. Also be aware of what other homes are being sold for in your neighborhood. If your loan is under five years old, it's likely you haven't greatly reduced principal � it's been mostly interest.

The Proof is in the Appraisal

You can start the process of canceling PMI when you determine your equity reaches 20%. You will need to contact your lender to alert them that you wish to cancel PMI payments. Next, you will be asked to submit documentation that you are eligible to cancel. Most lenders require a state certified appraisal documented on the form: URAR-1004 (Uniform Residential Appraisal Report) to determine your equity and eligibility for PMI cancellation.

ADVISORY MORTGAGE can help find out if you can eliminate your PMI. Call us at 8102292820.