Make Private Mortgage Insurance a Thing of the Past

Beginning in 1999, lending institutions have been required to cancel a borrower's Private Mortgage Insurance (PMI) at the point his loan balance (for loans closed past July of '99) goes under seventy-eight percent of the purchase price, but not when the borrower's equity reaches twenty-two percent or higher. (Some "higher risk" loans are excluded.) But if your equity gets to 20% (regardless of the original purchase price), you have the right to cancel PMI (for a loan that after July 1999).

Verify the numbers

Keep a running total of each principal payment. You'll want to be aware of the the purchase prices of the houses that sell around you. You are paying mostly interest if your closing was 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 PMI cancelation when you determine your equity reaches 20%. Call the mortgage lender to request cancellation of your PMI. Next, you will be required to submit documentation that you are eligible to cancel. 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.

At MS Investment Mortgage Company, we answer questions about PMI every day. Give us a call: (858) 485-5800.