Make Private Mortgage Insurance a Thing of the Past

While lending institutions have been legally obligated (for loans closed after July 1999) to cancel Private Mortgage Insurance (PMI) when the mortgage balance dips below 78% of the price of purchase, they do not have to cancel PMI automatically if the loan's equity is above 22%. (There are some loans that are excluded -like some "high risk' loans.) However, if your equity rises to 20% (regardless of the original purchase price), you have the right to cancel the PMI (for a mortgage that past July 1999).

Do your homework

Familiarize yourself with your mortgage statements to keep track of principal payments. You'll want to stay aware of the the purchase prices of the houses that are selling in your neighborhood. Unfortunately, if yours is a recent mortgage loan - five years or under, you probably haven't started to pay very much of the principal: you are paying mostly interest.

Verify Eligibility

Once your equity has reached the desired twenty percent, you are not far away from getting rid of your PMI payments, for the life of your loan. Call your lending institution to ask for cancellation of your PMI. Next, you will be asked to verify that you have at least 20 percent equity. A state certified appraisal documented on the appropriate form (URAR-1004 - Uniform Residential Appraisal Report) is the best proof there is � and your lender will probably require one before they agree to cancel PMI.

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