Make Private Mortgage Insurance a Thing of the Past

For loans closed after July 1999, lenders are obligated (by federal law) to automatically cancel Private Mortgage Insurance (PMI) when the loan balance gets under 78 percent of your purchase price � but not at the point the loan reaches 22 percent equity. (Some "higher risk" morgages are not included.) The good news is that you can request cancelation of your PMI yourself (for your mortgage that closed after July '99), regardless of the original purchase price, when the equity rises to twenty percent.

Keep track of payments

Familiarize yourself with your loan statements to keep your eye on principal payments. You'll want to be aware of the the purchase amounts of the houses that are selling around you. You are paying mostly interest if you closed your loan fewer than 5 years ago, so your principal most likely hasn't lowered much.

Proof of Equity

As soon as your equity has reached the magic number of twenty percent, you are not far away from canceling your PMI payments, once and for all. You will first notify your lender that you are asking to cancel your PMI. Lenders require proof of eligibility at this point. A state certified appraisal using the appropriate form (URAR-1004 - Uniform Residential Appraisal Report) will be all the proof you need � and your lender will probably request one before they agree to cancel PMI.

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