Goodbye, PMI!

Beginning in 1999, lending institutions have been legally obligated to cancel a borrower's Private Mortgage Insurance (PMI) at the point his loan balance (for a loan made past July of that year) reaches less than seventy-eight percent of the purchase price, but not at the time the borrower's equity climbs to higher than twenty-two percent. (There are some loans that are not included -like some loans considered 'high risk'.) However, you can actually cancel PMI yourself (for mortgages closed after July 1999) at the point your equity rises to 20 percent, without consideration of the original price of purchase.

Keep track of payments

Analyze your loan statements often. You'll want to be aware of the the purchase amounts of the homes that sell around you. Unfortunately, if you have a recent loan - five years or under, you likely haven't had a chance to pay very much of the principal: you have been paying mostly interest.

The Proof is in the Appraisal

At the point you determine you have reached 20 percent equity, you can start the process of getting PMI out of your budget. Contact your lending institution to request cancellation of your Private Mortgage Insurance. Lending institutions request documentation verifying your eligibility at this point. A state certified appraisal documented on the appropriate form (URAR-1004 - Uniform Residential Appraisal Report) is the best proof there is � and most lenders require one before they'll cancel PMI.

Tier One Mortgage, LLC can answer questions about PMI and many others. Call us at 5852820960.