Make Private Mortgage Insurance a Thing of the Past

Since 1999, lenders have been obligated to cancel a borrower's Private Mortgage Insurance (PMI) when his loan balance (for loans made after July of that year) goes below seventy-eight percent of the purchase price, but not when the loan's equity gets to twenty-two percent or more. (There are some loans that are not covered by this law -like some "high risk' loans.) The good news is that you can cancel your PMI yourself (for your mortgage closing after July '99), without considering the original purchase price, after the equity reaches twenty percent.

Do your homework

Keep track of each principal payment. 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 your closing was fewer than 5 years ago, so your principal probably hasn't lowered much.

Proof of Equity

When you find you have reached 20 percent equity in your home, you can begin the process of getting PMI out of your budget. You will first notify your lender that you are requesting to cancel your PMI. Lending institutions ask for proof of eligibility at this point. Usually lenders require 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. Call us: 5852820960.