Make Private Mortgage Insurance a Thing of the Past

Since 1999, lending institutions have been required to cancel a borrower's Private Mortgage Insurance (PMI) when his loan balance (for loans made after July of that year) goes down below seventy-eight percent of the price of purchase, but not when the loan's equity climbs to twenty-two percent or higher. (The legal requirment does not apply to a number of higher risk mortgages.) But you can actually cancel PMI yourself (for mortgages made past July 1999) once your equity rises to 20 percent, without consideration of the original price of purchase.

Keep a running total of payments

Keep track of money going toward the principal. Also keep track of how much other homes are selling for in your neighborhood. You've been paying mostly interest if your mortgage closed fewer than 5 years ago, so your principal probably hasn't gone down much.

The Proof is in the Appraisal

Once your equity has reached the desired twenty percent, you are close to getting rid of your PMI payments, for the life of your loan. Call the lender to request cancellation of your Private Mortgage Insurance. Lenders request paperwork verifying your eligibility at this point. A state certified appraisal using the appropriate form (URAR-1004 - Uniform Residential Appraisal Report) verifies your equity amount � and your lender will probably require one before they'll cancel PMI.

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

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