Eliminating Private Mortgage Insurance

Since 1999, lenders have been obligated to cancel a borrower's Private Mortgage Insurance (PMI) at the point his mortgage balance (for loans made past July of that year) reaches less than seventy-eight percent of the price of purchase, but not when the loan's equity gets to over twenty-two percent. (There are some exceptions -like some loans considered 'high risk'.) However, if your equity gets to 20% (no matter what the original price was), you have the right to cancel the PMI (for a loan closed past July 1999).

Do your homework

Familiarize yourself with your mortgage statements to keep track of principal payments. You'll want to stay aware of the the purchase prices of the homes that sell in your neighborhood. You are paying mostly interest if your closing was fewer than 5 years ago, so your principal most likely hasn't been reduced by much.

Verify Equity Amount

You can begin the process of PMI cancelation at the time you're sure your equity has risen to 20%. You will need to call the lending institution to let them know that you wish to cancel PMI payments. Lenders ask for paperwork verifying your eligibility at this point. Usually 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 answer questions about PMI and many others. Give us a call at (281) 778-0805.

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