Goodbye, PMI!

Beginning in 1999, lending institutions have been obligated to cancel a borrower's Private Mortgage Insurance (PMI) at the point his loan balance (for loans made after July of '99) goes down below seventy-eight percent of the purchase price, but not at the time the borrower's equity climbs to over twenty-two percent. (This legal requirment does not cover certain higher risk mortgages.) The good news is that you can cancel your PMI yourself (for your mortgage that closed after July '99), no matter the original purchase price, at the point the equity gets to twenty percent.

Do your homework

Keep track of money going toward the principal. You'll want to stay aware of the prices of the homes that are selling in your neighborhood. Unfortunately, if yours is a new loan - five years or under, you probably haven't had a chance to pay very much of the principal: you have been paying mostly interest.

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, for the life of your loan. First you will let your lender know that you are asking to cancel PMI. Lenders request proof of eligibility at this point. Most 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.

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 at 2146635355.