Canceling Private Mortgage Insurance

Since 1999, lending institutions have been obligated to cancel a borrower's Private Mortgage Insurance (PMI) at the point his mortgage balance (for a loan made past July of '99) reaches less than seventy-eight percent of the price of purchase, but not when the borrower's equity gets to twenty-two percent or higher. (There are exceptions -like some loans considered 'high risk'.) But you have the right to cancel PMI yourself (for loans made past July 1999) when your equity reaches 20 percent, regardless of the original purchase price.

Keep track of payments

Study your loan statements often. Find out the purchase prices of other homes in your neighborhood. You are paying mostly interest if you closed your mortgage loan fewer than 5 years ago, so your principal most likely hasn't gone down much.

Proof of Equity

Once your equity has reached the desired twenty percent, you are close to getting rid of your PMI payments, once and for all. Call the lending institution to ask for cancellation of PMI. Your lender will ask for documentation that your equity is high enough. Usually 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 PMI cancellation.

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