Make Private Mortgage Insurance a Thing of the Past

For loans closed after July 1999, lending institutions are obligated (by federal law) to automatically cancel Private Mortgage Insurance (PMI) when the balance of the loan goes lower than 78 percent of your purchase amount � but not when the borrower achieves 22 percent equity. (There are some loans that are not included -like a number of "high risk' loans.) The good news is that you can request cancelation of your PMI yourself (for a loan that closed past July '99), without considering the original purchase price, when your equity gets to twenty percent.

Keep a record of payments

Study your loan statements often. Find out the purchase prices of other houses in your neighborhood. Unfortunately, if yours is a new mortgage loan - five years or fewer, you probably haven't had a chance to pay much of the principal: you have been paying mostly interest.

Verify Eligibility

As soon as your equity has reached the desired twenty percent, you are close to stopping your PMI payments, once and for all. You will need to notify your mortgage lender that you want to cancel PMI payments. Next, you will be asked to verify that you are eligible to cancel. The best proof there is can be found in a state certified appraisal on form URAR-1004 (Uniform Residential Appraisal Report), which is required by most lenders before 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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