Eliminating Private Mortgage Insurance

Since 1999, lending institutions have been legally required to cancel a borrower's Private Mortgage Insurance (PMI) when his mortgage balance (for a loan closed after July of '99) reaches less than seventy-eight percent of the purchase price, but not when the loan's equity gets to twenty-two percent or more. (Some "higher risk" morgages are excluded.) However, you can actually cancel PMI yourself (for loans closed after July 1999) at the point your equity gets to 20 percent, without consideration of the original purchase price.

Keep a running total of payments

Study your mortgage statements often. You'll want to stay aware of the the purchase amounts of the homes that are selling around you. You've been paying mostly interest if you closed your mortgage loan fewer than 5 years ago, so your principal probably hasn't lowered much.

Verify Equity Amount

At the point you find you have achieved at least 20 percent equity in your home, you can begin the process of freeing yourself from PMI payments. You will need to notify your mortgage lender that you wish to cancel PMI. Then you will be asked to submit proof that you are eligible to cancel. Most lenders ask for a state certified appraisal documented on the form: URAR-1004 (Uniform Residential Appraisal Report) to determine your equity and eligibility for canceling PMI.

Tier One Mortgage, LLC can help find out if you can eliminate your PMI. Call us at 5852820960.