Make Private Mortgage Insurance a Thing of the Past

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

Verify the numbers

Familiarize yourself with your monthly statements to keep track of principal payments. Find out the purchase prices of other homes in your neighborhood. If your loan is under five years old, it's likely you haven't made much progress with the principal � it's been mostly interest.

Proof of Equity

At the point your equity has reached the magic number of twenty percent, you are not far away from stopping your PMI payments, for the life of your loan. Contact the mortgage lender to ask for cancellation of your PMI. The lending institution will ask for proof that your equity is high enough. Most lenders ask for a state certified appraisal documented on the form: URAR-1004 (Uniform Residential Appraisal Report) to verify your home's equity and eligibility for PMI cancellation.

1st Credential Mortgage Inc can help find out if you can eliminate your PMI. Call us: (281) 778-0805.

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