Goodbye, PMI!

Beginning in 1999, lending institutions have been legally required to cancel a borrower's Private Mortgage Insurance (PMI) at the point his loan balance (for loans made after July of that year) reaches less than seventy-eight percent of the price of purchase, but not when the borrower's equity gets to twenty-two percent or more. (Certain "higher risk" loan programs are excluded.) The good news is that you can cancel your PMI yourself (for a mortgage loan closing past July '99), without considering the original price of purchase, when the equity reaches twenty percent.

Keep a record of payments

Keep a running total of each principal payment. Also be aware of the price that other homes are being sold for in your neighborhood. If your mortgage is under five years old, it's likely you haven't greatly reduced principal � you have been paying mostly interest.

Verify Equity Amount

Once your equity has reached the magic number of twenty percent, you are just a few steps away from getting rid of your PMI payments, once and for all. Contact the lender to request cancellation of your PMI. Lending institutions require paperwork verifying your eligibility at this point. Most lenders ask for a state certified appraisal documented on the form: URAR-1004 (Uniform Residential Appraisal Report) to determine your equity and eligibility for canceling PMI.

American Mortgage Advisers, Inc can help find out if you can eliminate your PMI. Give us a call at 2147390569.