Eliminating Private Mortgage Insurance

For loans closed since July 1999, lenders are obligated (by federal law) to automatically cancel Private Mortgage Insurance (PMI) when the balance of the loan gets lower than 78 percent of your purchase amount � but not when the loan reaches 22 percent equity. (A number of "higher risk" loans are excluded.) But if your equity gets to 20% (regardless of the original purchase price), you are able to cancel your PMI (for a mortgage closed past July 1999).

Do your homework

Analyze your monthly statements often. Make yourself aware of the prices of other homes in your neighborhood. If your loan is fewer than five years old, it's likely you haven't paid down much principal � it's been mostly interest.

The Proof is in the Appraisal

At the point your equity has risen to the desired twenty percent, you are just a few steps away from canceling your PMI payments, once and for all. Call your lending institution to request cancellation of PMI. Your lender will request documentation that your equity is at 20 percent or above. A state certified appraisal documented on the appropriate form (URAR-1004 - Uniform Residential Appraisal Report) is the best proof there is � and your lender will probably require one before they agree to cancel.

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

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