Make Private Mortgage Insurance a Thing of the Past

For loans made since July 1999, lenders are required (by federal law) to automatically cancel Private Mortgage Insurance (PMI) when the loan balance gets below 78 percent of your purchase amount � but not at the point the borrower earns 22 percent equity. (There are some exceptions -like some "high risk' loans.) But you are able to cancel PMI yourself (for mortgage loans made after July 1999) when your equity rises to 20 percent, no matter the original price of purchase.

Do your homework

Review your statements often. Also keep track of the price that other homes are being sold for in your neighborhood. Unfortunately, if yours is a recent mortgage - five years or fewer, you probably haven't had a chance to pay very much of the principal: you have been paying mostly interest.

Verify Equity Amount

You can begin the process of canceling your PMI as soon as you're sure your equity has risen to 20%. You will need to call the mortgage lender to let them know that you wish to cancel PMI payments. Your lender will request proof that your equity is at 20 percent or above. Most lenders ask for a state certified appraisal documented on the form: URAR-1004 (Uniform Residential Appraisal Report) to verify your home's equity and eligibility for PMI cancellation.

One Source Lending 303-220-7500 can help find out if you can eliminate your PMI. Give us a call: 303-220-7500.