Eliminating Private Mortgage Insurance

For loans made after July 1999, lenders are required (by federal law) to automatically cancel Private Mortgage Insurance (PMI) when the balance of the loan goes below 78 percent of your purchase amount � but not at the point the borrower achieves 22 percent equity. (There are some exceptions -like some loans considered 'high risk'.) However, if your equity reaches 20% (regardless of the original purchase price), you can cancel PMI (for a loan closed after July 1999).

Keep a record of payments

Review your monthly statements often. Also stay aware of what other homes are purchased for in your neighborhood. Unfortunately, if yours is a new mortgage loan - five years or fewer, you probably haven't started to pay a lot of the principal: you have been paying mostly interest.

Verify Equity Amount

You can start the process of canceling your PMI when you calculate that your equity has reached 20%. Call your mortgage lender to ask for cancellation of your PMI. Lenders ask for proof of eligibility at this point. You can acquire proof of your home's equity by getting a state certified appraisal using form URAR-1004 (Uniform Residential Appraisal Report), 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 5852820960.