Make Private Mortgage Insurance a Thing of the Past

Although lending institutions have been required (for loans closed after July 1999) to cancel Private Mortgage Insurance (PMI) when the loan balance goes below 78% of the purchase price, they do not have to cancel automatically if the equity is over 22%. (Certain "higher risk" loans are not included.) But if your equity rises to 20% (regardless of the original price of purchase), you have the right to cancel your PMI (for a mortgage loan closed after July 1999).

Verify the numbers

Familiarize yourself with your monthly statements to keep a running total of principal payments. You'll want to be aware of the the purchase prices of the houses that sell around you. If your loan is fewer than five years old, probably you haven't paid down much principal � it's been mostly interest.

Verify Equity Amount

You can begin the process of canceling your PMI when you're sure your equity has risen to 20%. Contact your mortgage lender to request cancellation of PMI. Your lender will request documentation that your equity is at 20 percent or above. Most lenders require a state certified appraisal documented on the form: URAR-1004 (Uniform Residential Appraisal Report) to determine your home's equity and eligibility for PMI cancellation.

ADVISORY MORTGAGE can answer questions about PMI and many others. Give us a call: 8102292820.