Make Private Mortgage Insurance a Thing of the Past

For loans made after July 1999, lending institutions are obligated (by federal law) to automatically cancel Private Mortgage Insurance (PMI) when the loan balance falls lower than 78 percent of your purchase amount � but not when the borrower achieves 22 percent equity. (This legal requirment does not cover a number of higher risk mortgages.) The good news is that you can request cancelation of your PMI yourself (for a loan closing after July '99), regardless of the original price of purchase, after the equity reaches twenty percent.

Verify the numbers

Review your statements often. Also keep track of the price that other homes are purchased for in your neighborhood. If your loan is under five years old, chances are you haven't paid down much principal � it's been mostly interest.

Verify Eligibility

Once you determine you've reached 20 percent equity in your home, you can begin the process of canceling your Private Mortgage Insurance. Call your mortgage lender to ask for cancellation of your Private Mortgage Insurance. Next, you will be asked to submit documentation that you have at least 20 percent equity. Most lenders require a state certified appraisal documented on the form: URAR-1004 (Uniform Residential Appraisal Report) to determine your home's equity and eligibility for canceling PMI.

MS Investment Mortgage Company can help find out if you can eliminate your PMI. Call us: (858) 485-5800.