Goodbye, PMI!

For loans closed after July 1999, lenders are required (by federal law) to automatically cancel Private Mortgage Insurance (PMI) when the loan balance gets below 78 percent of the purchase amount � but not when the loan reaches 22 percent equity. (There are exceptions -like some loans considered 'high risk'.) The good news is that you can request cancelation of your PMI yourself (for your mortgage loan that closed after July '99), no matter the original purchase price, at the point the equity reaches twenty percent.

Do your homework

Familiarize yourself with your mortgage statements to keep your eye on principal payments. Make yourself aware of the prices of other houses in your immediate area. Unfortunately, if yours is a recent mortgage loan - five years or fewer, you probably haven't started to pay a lot of the principal: you have been paying mostly interest.

Proof of Equity

You can begin the process of canceling PMI when you're sure your equity reaches 20%. Contact the lending institution to request cancellation of your Private Mortgage Insurance. Next, you will be asked to verify that you have at least 20 percent equity. Most lenders require a state certified appraisal documented on the form: URAR-1004 (Uniform Residential Appraisal Report) to verify your home's equity and eligibility for canceling PMI.

At CHASE MORTGAGE, Inc. #317430, we answer questions about PMI every day. Give us a call: 4357556622.