Make Private Mortgage Insurance a Thing of the Past

Although lenders have been required (for loans closed after July '99) to cancel Private Mortgage Insurance (PMI) at the time the balance dips under 78% of the purchase price, they do not have to cancel automatically if the borrower's equity is more than 22%. (There are some loans that are not included -like some loans considered 'high risk'.) However, you have the right to cancel PMI yourself (for mortgage loans made after July 1999) when your equity gets to 20 percent, no matter the original price of purchase.

Do your homework

Review your statements often. You'll want to stay aware of the prices of the houses that are selling around you. You are paying mostly interest if your mortgage closed fewer than 5 years ago, so your principal most likely hasn't lowered much.

Proof of Equity

At the point your equity has risen to the required twenty percent, you are not far away from canceling your PMI payments, once and for all. You will need to contact the mortgage lender to alert them that you wish to cancel PMI. Lenders request documentation verifying your eligibility at this point. A state certified appraisal using the appropriate form (URAR-1004 - Uniform Residential Appraisal Report) is the best proof there is � and your lender will probably require one before they'll cancel PMI.

ADVISORY MORTGAGE can answer questions about PMI and many others. Call us at 8102292820.