Goodbye, PMI!

Since 1999, lending institutions have been obligated to cancel a borrower's Private Mortgage Insurance (PMI) at the point his mortgage balance (for a loan made past July of '99) goes below seventy-eight percent of the purchase price, but not at the time the loan's equity climbs to twenty-two percent or more. (The legal requirment does not apply to certain higher risk mortgages.) However, if your equity reaches 20% (no matter what the original price was), you have the legal right to cancel PMI (for a mortgage loan that after July 1999).

Keep a record of payments

Keep a running total of each principal payment. You'll want to be aware of the the purchase amounts of the houses that are selling in your neighborhood. Unfortunately, if yours is a recent mortgage loan - five years or under, you probably haven't begun to pay much of the principal: you are paying mostly interest.

Verify Eligibility

You can start the process of canceling PMI at the time you're sure your equity reaches 20%. Call the mortgage lender to request cancellation of your PMI. Next, you will be asked to submit proof that you have at least 20 percent equity. A state certified appraisal documented on the appropriate form (URAR-1004 - Uniform Residential Appraisal Report) will document your equity amount � and your lender will probably request one before they agree to cancel PMI.

American Mortgage Advisers, Inc can answer questions about PMI and many others. Give us a call: 2148657442.