Goodbye, PMI!

Since 1999, lenders have been legally obligated to cancel a borrower's Private Mortgage Insurance (PMI) when his mortgage balance (for loans made after July of '99) reaches less than seventy-eight percent of the price of purchase, but not at the time the borrower's equity gets to twenty-two percent or higher. (This legal requirment does not include a number of higher risk mortgages.) However, you have the right to cancel PMI yourself (for loans made after July 1999) at the point your equity gets to 20 percent, no matter the original price of purchase.

Keep track of payments

Keep a running total of your principal payments. Pay attention to the prices of other homes in your immediate area. Unfortunately, if you have a recent loan - five years or fewer, you probably haven't started to pay much of the principal: you are paying mostly interest.

Verify Equity Amount

At the point your equity has risen to the required twenty percent, you are just a few steps away from canceling your PMI payments, for the life of your loan. Call your lender to request cancellation of your Private Mortgage Insurance. Next, you will be asked to verify that you have at least 20 percent equity. Most lenders require a state certified appraisal documented on the form: URAR-1004 (Uniform Residential Appraisal Report) to determine your home's 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.