Goodbye, PMI!

Although lenders have been obligated (for loans closed after July 1999) 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 over 22%. (There are exceptions -like some "high risk' loans.) But if your equity reaches 20% (regardless of the original purchase price), you are able to cancel your PMI (for a mortgage that past July 1999).

Do your homework

Keep a running total of money going toward the principal. Also stay aware of the price that other homes are purchased for in your neighborhood. You are paying mostly interest if you closed your mortgage fewer than 5 years ago, so your principal probably hasn't gone down much.

The Proof is in the Appraisal

Once your equity has reached the desired twenty percent, you are just a few steps away from getting rid of your PMI payments, for the life of your loan. Call your lender to ask for cancellation of PMI. Lenders request 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 equity and eligibility for PMI cancellation.

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