Make Private Mortgage Insurance a Thing of the Past

While lending institutions have been obligated (for loans closed after July 1999) to cancel Private Mortgage Insurance (PMI) when the mortgage balance goes below 78% of the price of purchase, they do not have to cancel automatically if the loan's equity is more than 22%. (There are exceptions -like certain "high risk' loans.) However, you are able to cancel PMI yourself (for mortgages closed past July 1999) at the point your equity reaches 20 percent, regardless of the original price of purchase.

Verify the numbers

Keep a running total of each principal payment. Also be aware of how much other homes are selling for in your neighborhood. You are paying mostly interest if you closed your loan fewer than 5 years ago, so your principal probably hasn't gone down much.

The Proof is in the Appraisal

You can start the process of canceling your PMI as soon as you you think that your equity reaches 20%. Call your mortgage lender to request cancellation of PMI. Your lender will ask for proof that your equity is high enough. Usually 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.

Ward Kilduff Mortgage can help find out if you can eliminate your PMI. Call us at (860) 658-7100.

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