Goodbye, PMI!

Beginning in 1999, lenders have been required to cancel a borrower's Private Mortgage Insurance (PMI) at the point his mortgage balance (for loans closed past July of that year) goes down below seventy-eight percent of the price of purchase, but not when the loan's equity reaches twenty-two percent or higher. (Certain "higher risk" loan programs are not included.) However, you have the right to cancel PMI yourself (for loans closed past July 1999) once your equity gets to 20 percent, no matter the original purchase price.

Do your homework

Keep a running total of each principal payment. You'll want to stay aware of the the purchase amounts of the houses that sell around you. You are paying mostly interest if you closed your mortgage loan fewer than 5 years ago, so your principal probably hasn't been reduced by much.

Proof of Equity

You can begin the process of PMI cancelation at the time you're sure your equity reaches 20%. First you will let your lender know that you are requesting to cancel PMI. The lending institution will request documentation that your equity is high enough. A state certified appraisal documented on the appropriate form (URAR-1004 - Uniform Residential Appraisal Report) is all the proof you need � and your lender will probably request one before they agree to cancel PMI.

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