Eliminating Private Mortgage Insurance

Since 1999, lending institutions have been obligated to cancel a borrower's Private Mortgage Insurance (PMI) at the point his loan balance (for a loan made after July of that year) reaches less than seventy-eight percent of the price of purchase, but not when the loan's equity reaches twenty-two percent or more. (There are exceptions -like some loans considered 'high risk'.) The good news is that you can cancel your PMI yourself (for a loan that closed past July '99), no matter the original price of purchase, once the equity gets to twenty percent.

Verify the numbers

Familiarize yourself with your monthly statements to keep track of principal payments. Also be aware of how much other homes are being sold for in your neighborhood. You are paying mostly interest if your closing was fewer than 5 years ago, so your principal most likely hasn't lowered much.

Verify Eligibility

You can start the process of canceling PMI as soon as you're sure your equity has reached 20%. Call the lender to ask for cancellation of your PMI. The lending institution will require 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), which is required by most lenders before canceling PMI.

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