Eliminating Private Mortgage Insurance

While lenders have been legally required (for loans closed after July '99) to cancel Private Mortgage Insurance (PMI) at the time the mortgage balance dips below 78% of the price of purchase, they do not have to cancel automatically if the equity is above 22%. (The legal requirment does not apply to certain higher risk mortgages.) However, if your equity reaches 20% (regardless of the original purchase price), you can cancel PMI (for a loan closed past July 1999).

Keep a running total of payments

Review your statements often. Also be aware of what other homes are selling for in your neighborhood. Unfortunately, if you have a new mortgage - five years or under, you probably haven't started to pay much of the principal: you have been paying mostly interest.

Verify Eligibility

As soon as your equity has reached the required twenty percent, you are close to getting rid of your PMI payments, for the life of your loan. You will first notify your lender that you are asking to cancel PMI. Your lender will ask for documentation that your equity is high enough. Most lenders require 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, Inc. #317430 can answer questions about PMI and many others. Give us a call: 4357556622.