Make Private Mortgage Insurance a Thing of the Past

While lenders have been required (for loans closed past July 1999) to cancel Private Mortgage Insurance (PMI) when the loan balance dips below 78% of the purchase price, they do not have to cancel PMI automatically if the equity is over 22%. (There are some exceptions -like certain "high risk' loans.) The good news is that you can cancel your PMI yourself (for your mortgage loan closing past July '99), no matter the original purchase price, after your equity reaches twenty percent.

Do your homework

Review your statements often. You'll want to stay aware of the the purchase prices of the houses that are selling around you. If your loan is fewer than five years old, probably you haven't greatly reduced principal � you have paid mostly interest.

The Proof is in the Appraisal

At the point you determine you've reached 20 percent equity, you can start the process of getting PMI out of your budget. Call your mortgage lender to ask for cancellation of your PMI. Your lender will request proof that your equity is at 20 percent or above. The best proof there is can be found in a state certified appraisal on form URAR-1004 (Uniform Residential Appraisal Report), required by most lenders before canceling PMI.

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