Make Private Mortgage Insurance a Thing of the Past

Since 1999, lending institutions have been obligated to cancel a borrower's Private Mortgage Insurance (PMI) when his loan balance (for loans made past July of '99) goes below seventy-eight percent of the price of purchase, but not when the loan's equity gets to twenty-two percent or more. (There are some loans that are not included -like a number of "high risk' loans.) The good news is that you can cancel your PMI yourself (for a mortgage that closed after July '99), no matter the original purchase price, at the point the equity reaches twenty percent.

Verify the numbers

Keep a running total of each principal payment. Also be aware of how much other homes are being sold for in your neighborhood. You've been paying mostly interest if your mortgage closed fewer than 5 years ago, so your principal most likely hasn't gone down much.

Proof of Equity

At the point you think you have achieved at least 20 percent equity in your home, you can begin the process of canceling your Private Mortgage Insurance. Call the mortgage lender to ask for cancellation of PMI. Lenders request documentation verifying your eligibility at this point. A state certified appraisal documented on the appropriate form (URAR-1004 - Uniform Residential Appraisal Report) documents your equity amount � and your lender will probably require one before they agree to cancel PMI.

Ward Kilduff Mortgage can answer questions about PMI and many others. Call us at (860) 658-7100.

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