Eliminating Private Mortgage Insurance

While lending institutions have been legally required (for loans closed past July 1999) to cancel Private Mortgage Insurance (PMI) when the loan balance goes below 78% of the price of purchase, they do not have to cancel automatically if the equity is above 22%. (There are exceptions -like certain "high risk' loans.) The good news is that you can cancel your PMI yourself (for a loan that closed after July '99), without considering the original price of purchase, once the equity reaches twenty percent.

Keep track of payments

Review your mortgage statements often. You'll want to keep track of the the purchase prices of the houses that are selling around you. You are paying mostly interest if your closing was fewer than 5 years ago, so your principal probably hasn't gone down much.

Proof of Equity

You can begin the process of PMI cancelation as soon as you're sure your equity has risen to 20%. First you will notify your lender that you are requesting to cancel PMI. Then you will be asked to submit proof that you are eligible to cancel. Usually lenders ask for a state certified appraisal documented on the form: URAR-1004 (Uniform Residential Appraisal Report) to verify your equity and eligibility for canceling PMI.

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