Goodbye, PMI!

For loans made since July 1999, lenders are required (by federal law) to automatically cancel Private Mortgage Insurance (PMI) when the loan balance goes under 78 percent of the purchase amount � but not when the loan reaches 22 percent equity. (Some "higher risk" morgages are not included.) But you can actually cancel PMI yourself (for mortgage loans made past July 1999) when your equity rises to 20 percent, regardless of the original purchase price.

Do your homework

Familiarize yourself with your monthly statements to keep your eye on principal payments. Make yourself aware of the selling prices of other homes in your immediate area. You've been paying mostly interest if your mortgage loan closed fewer than 5 years ago, so your principal probably hasn't been reduced by much.

Verify Equity Amount

At the point you think you have achieved at least 20 percent equity, you can start the process of canceling your Private Mortgage Insurance. Contact the lender to ask for cancellation of PMI. The lending institution will require documentation that your equity is at 20 percent or above. Usually lenders require a state certified appraisal documented on the form: URAR-1004 (Uniform Residential Appraisal Report) to verify your equity and eligibility for canceling PMI.

ADVISORY MORTGAGE can help find out if you can eliminate your PMI. Give us a call: 8102292820.