Goodbye, PMI!

Although lenders have been legally obligated (for loans closed after July '99) to cancel Private Mortgage Insurance (PMI) at the time the balance gets under 78% of the purchase price, they do not have to take similar action if the borrower's equity is over 22%. (This legal obligation does not cover certain higher risk mortgages.) But if your equity rises to 20% (regardless of the original price of purchase), you have the right to cancel your PMI (for a mortgage closed past July 1999).

Keep a running total of payments

Keep track of money going toward the principal. Pay attention to the purchase prices of other homes in your immediate area. If your mortgage is fewer than five years old, it's likely you haven't paid down much principal � you have paid mostly interest.

Verify Equity Amount

You can start the process of canceling your PMI when you're sure your equity has risen to 20%. You will first tell your lender that you are asking to cancel your PMI. The lending institution will require documentation that your equity is high enough. Most lenders require a state certified appraisal documented on the form: URAR-1004 (Uniform Residential Appraisal Report) to determine your home's equity and eligibility for canceling PMI.

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

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