Canceling Private Mortgage Insurance

Beginning in 1999, lenders have been obligated to cancel a borrower's Private Mortgage Insurance (PMI) at the point his loan balance (for a loan closed after July of '99) goes under seventy-eight percent of the purchase price, but not at the point the borrower's equity gets to twenty-two percent or higher. (The legal requirment does not include certain higher risk mortgages.) The good news is that you can request cancelation of your PMI yourself (for your loan that closed after July '99), regardless of the original price of purchase, after the equity reaches twenty percent.

Verify the numbers

Review your statements often. Also stay aware of how much other homes are selling for in your neighborhood. You are paying mostly interest if your mortgage closed fewer than 5 years ago, so your principal most likely hasn't lowered much.

Verify Equity Amount

At the point your equity has reached the desired twenty percent, you are not far away from canceling your PMI payments, for the life of your loan. You will need to notify your mortgage lender that you wish to cancel PMI payments. Lenders ask for proof of eligibility at this point. Usually lenders ask for a state certified appraisal documented on the form: URAR-1004 (Uniform Residential Appraisal Report) to determine your home's equity and eligibility for PMI cancellation.

Chase Mortgage can answer questions about PMI and many others. Give us a call: 435-755-6622.