Make Private Mortgage Insurance a Thing of the Past

Although lenders have been obligated (for loans closed after July '99) to cancel Private Mortgage Insurance (PMI) at the time the balance goes under 78% of the purchase price, they do not have to take similar action if the loan's equity is above 22%. (There are some exceptions -like some "high risk' loans.) However, you are able to cancel PMI yourself (for loans closed past July 1999) when your equity reaches 20 percent, regardless of the original price of purchase.

Do your homework

Analyze your monthly statements often. Find out the prices of other houses in your neighborhood. You are paying mostly interest if the closing was fewer than 5 years ago, so your principal most likely hasn't gone down much.

Verify Eligibility

Once you determine you've reached 20 percent equity in your home, you can start the process of freeing yourself from PMI payments. You will first tell your lender that you are requesting to cancel PMI. Your lender will ask for documentation that your equity is high enough. The best proof there is can be found in a state certified appraisal using form URAR-1004 (Uniform Residential Appraisal Report), which is required by most lending institutions before canceling PMI.

Debbie Oliver NMLS License #248252, America's First Choice Mortgage, NMLS License #279234 can answer questions about PMI and many others. Give us a call at 2146635355.