Canceling Private Mortgage Insurance

Beginning in 1999, lending institutions have been legally obligated to cancel a borrower's Private Mortgage Insurance (PMI) at the point his loan balance (for a loan closed past July of that year) reaches less than seventy-eight percent of the price of purchase, but not at the point the borrower's equity reaches twenty-two percent or more. (A number of "higher risk" loans are excluded.) But if your equity rises to 20% (no matter what the original price was), you have the legal right to cancel PMI (for a mortgage loan closed past July 1999).

Verify the numbers

Keep a running total of your principal payments. You'll want to be aware of the the purchase prices of the homes that sell in your neighborhood. You are paying mostly interest if your closing was fewer than 5 years ago, so your principal probably hasn't been reduced by much.

Verify Eligibility

Once your equity has reached the magic number of twenty percent, you are close to stopping your PMI payments, for the life of your loan. You will first notify your lender that you are requesting to cancel your PMI. The lending institution will require documentation that your equity is high enough. You can get documentation of your home's equity by getting a state certified appraisal on form URAR-1004 (Uniform Residential Appraisal Report), which is required by most lending institutions before canceling PMI.

America's Money Source can help find out if you can eliminate your PMI. Give us a call: 4078987559.


America's Money Source

2306 Curry Ford Rd
Orlando, FL 32806