Eliminating Private Mortgage Insurance

Since 1999, lenders have been required to cancel a borrower's Private Mortgage Insurance (PMI) at the point his loan balance (for a loan made past July of that year) goes beneath seventy-eight percent of the price of purchase, but not at the time the loan's equity climbs to over twenty-two percent. (There are some loans that are excluded -like certain "high risk' loans.) But if your equity reaches 20% (no matter what the original price was), you can cancel PMI (for a loan that past July 1999).

Do your homework

Study your statements often. Pay attention to the purchase prices of other homes in your immediate area. You've been paying mostly interest if you closed your loan fewer than 5 years ago, so your principal probably hasn't gone down much.

Verify Eligibility

When you find you have reached 20 percent equity in your home, you can begin the process of canceling your Private Mortgage Insurance. Call the lender to request cancellation of PMI. Then you will be asked to submit documentation that you are eligible to cancel. Usually lenders ask for a state certified appraisal documented on the form: URAR-1004 (Uniform Residential Appraisal Report) to determine your equity and eligibility for canceling PMI.

One Source Lending can answer questions about PMI and many others. Give us a call at 3032207500.