Canceling Private Mortgage Insurance

While lenders have been obligated (for loans closed past July 1999) to cancel Private Mortgage Insurance (PMI) when the loan balance goes under 78% of the purchase price, they do not have to take similar action if the loan's equity is above 22%. (The legal obligation does not include some higher risk mortgages.) However, if your equity reaches 20% (regardless of the original price of purchase), you can cancel PMI (for a mortgage that past July 1999).

Verify the numbers

Study your statements often. You'll want to be aware of the the purchase prices of the homes that are selling in your neighborhood. Unfortunately, if you have a recent mortgage loan - five years or fewer, you probably haven't started to pay much of the principal: you are paying mostly interest.

The Proof is in the Appraisal

You can start the process of canceling your PMI at the time you're sure your equity has risen to 20%. You will need to notify your mortgage lender that you want to cancel PMI payments. The lending institution will request proof 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 help find out if you can eliminate your PMI. Call us: 2146635355.