Goodbye, PMI!

Beginning in 1999, lenders have been required to cancel a borrower's Private Mortgage Insurance (PMI) at the point his mortgage balance (for a loan closed past July of '99) goes below seventy-eight percent of the price of purchase, but not when the loan's equity reaches twenty-two percent or higher. (The law does not apply to a number of higher risk mortgages.) However, if your equity rises to 20% (regardless of the original price of purchase), you are able to cancel the PMI (for a mortgage loan that after July 1999).

Verify the numbers

Keep a running total of money going toward the principal. You'll want to be aware of the prices of the homes that sell in your neighborhood. If your loan is fewer than five years old, it's likely you haven't greatly reduced principal � it's been mostly interest.

The Proof is in the Appraisal

Once you think you have achieved at least 20 percent equity in your home, you can start the process of getting PMI out of your budget. You will need to notify your mortgage lender that you want to cancel PMI. Lenders request paperwork verifying your eligibility at this point. You can get documentation of your equity by getting a state certified appraisal using form URAR-1004 (Uniform Residential Appraisal Report), which is required by most lending institutions before canceling PMI.

Feel Good About Your Mortgage! can help find out if you can eliminate your PMI. Give us a call at 8663001550.