Make Private Mortgage Insurance a Thing of the Past

Since 1999, lenders have been required to cancel a borrower's Private Mortgage Insurance (PMI) when his loan balance (for a loan closed past July of '99) goes under seventy-eight percent of the purchase price, but not when the loan's equity reaches more than twenty-two percent. (A number of "higher risk" loan programs are not included.) The good news is that you can request cancelation of your PMI yourself (for your mortgage loan closing past July '99), no matter the original price of purchase, at the point the equity reaches twenty percent.

Do your homework

Familiarize yourself with your loan statements to keep your eye on principal payments. Also keep track of what other homes are selling for in your neighborhood. You've been paying mostly interest if you closed your mortgage loan fewer than 5 years ago, so your principal most likely hasn't gone down much.

Proof of Equity

When you think you have reached 20 percent equity, you can start the process of freeing yourself from PMI payments. You will need to notify your mortgage lender that you wish to cancel PMI payments. Lending institutions require documentation verifying your eligibility at this point. A state certified appraisal using the appropriate form (URAR-1004 - Uniform Residential Appraisal Report) is the best proof there is � 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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