Goodbye, PMI!

For loans closed since July 1999, lending institutions are obligated (by federal law) to automatically cancel Private Mortgage Insurance (PMI) when the balance of the loan gets under 78 percent of the purchase price � but not at the point the borrower earns 22 percent equity. (The law does not cover some higher risk mortgages.) The good news is that you can cancel your PMI yourself (for a mortgage loan that closed after July '99), regardless of the original price of purchase, at the point your equity rises to twenty percent.

Verify the numbers

Keep a running total of each principal payment. Make yourself aware of the selling prices of other homes in your neighborhood. Unfortunately, if yours is a new loan - five years or fewer, you likely haven't been able to pay very much of the principal: you are paying mostly interest.

Proof of Equity

As soon as your equity has risen to the required twenty percent, you are just a few steps away from canceling your PMI payments, for the life of your loan. Contact your lending institution to request cancellation of PMI. Then you will be required to verify that you are eligible to cancel. You can get proof of your equity by getting a state certified appraisal using form URAR-1004 (Uniform Residential Appraisal Report), required by most lenders before canceling PMI.

1st Credential Mortgage Inc can answer questions about PMI and many others. Give us a call at (281) 778-0805.

Got a Question?

Do you have a question? We can help. Simply fill out the form below and we'll contact you with the answer, with no obligation to you. We guarantee your privacy.

Your Information
Your Question