Make Private Mortgage Insurance a Thing of the Past

While lenders have been legally obligated (for loans closed past July 1999) to cancel Private Mortgage Insurance (PMI) at the time the mortgage balance goes below 78% of the purchase price, they do not have to cancel PMI automatically if the loan's equity is over 22%. (Some "higher risk" loans are not included.) The good news is that you can request cancelation of your PMI yourself (for your mortgage loan closing past July '99), no matter the original price of purchase, at the point the equity climbs to twenty percent.

Verify the numbers

Familiarize yourself with your monthly statements to keep a running total of principal payments. Find out the purchase prices of other houses in your immediate area. You are paying mostly interest if you closed your mortgage fewer than 5 years ago, so your principal most likely hasn't lowered much.

Verify Eligibility

Once your equity has reached the desired twenty percent, you are just a few steps away from canceling your PMI payments, for the life of your loan. You will need to notify your mortgage lender that you want to cancel PMI. Your lender will request proof that your equity is high enough. 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 lending institutions before canceling PMI.

Tier One Mortgage, LLC can help find out if you can eliminate your PMI. Give us a call at (585) 282-0960.