Make Private Mortgage Insurance a Thing of the Past

For loans closed since July 1999, lenders are obligated (by federal law) to automatically cancel Private Mortgage Insurance (PMI) when the balance of the loan gets under 78 percent of the purchase price � but not when the loan reaches 22 percent equity. (There are exceptions -like a number of "high risk' loans.) The good news is that you can cancel your PMI yourself (for a mortgage loan closing after July '99), regardless of the original purchase price, after the equity reaches twenty percent.

Verify the numbers

Keep track of each principal payment. You'll want to be aware of the the purchase amounts of the houses that sell around you. Unfortunately, if you have a new mortgage - five years or fewer, you probably haven't started to pay very much of the principal: you have been paying mostly interest.

Verify Equity Amount

You can begin the process of PMI cancelation as soon as you determine your equity reaches 20%. Call your mortgage lender to ask for cancellation of PMI. Lending institutions ask for proof of eligibility at this point. A state certified appraisal documented on the appropriate form (URAR-1004 - Uniform Residential Appraisal Report) will document your equity amount � and your lender will probably require one before they agree to cancel PMI.

Debbie Oliver NMLS License #248252, America's First Choice Mortgage, NMLS License #279234 can help find out if you can eliminate your PMI. Give us a call: 2146635355.