Make Private Mortgage Insurance a Thing of the Past

While lending institutions have been obligated (for loans closed past July 1999) to cancel Private Mortgage Insurance (PMI) at the point the balance goes below 78% of the price of purchase, they do not have to cancel automatically if the loan's equity is over 22%. (This law does not cover some higher risk mortgages.) The good news is that you can cancel your PMI yourself (for a loan closing past July '99), regardless of the original price of purchase, once the equity rises to twenty percent.

Keep track of payments

Study your mortgage statements often. You'll want to stay aware of the the purchase prices of the houses that sell around you. You've been paying mostly interest if your closing was fewer than 5 years ago, so your principal most likely hasn't been reduced by much.

Proof of Equity

At the point you think you've reached 20 percent equity, you can begin the process of canceling your Private Mortgage Insurance. You will first notify your lender that you are asking to cancel PMI. Lenders require documentation verifying your eligibility at this point. Most lenders ask for a state certified appraisal documented on the form: URAR-1004 (Uniform Residential Appraisal Report) to determine your home's equity and eligibility for canceling PMI.

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