Goodbye, PMI!

Since 1999, lending institutions have been obligated to cancel a borrower's Private Mortgage Insurance (PMI) when his loan balance (for a loan closed past July of that year) reaches less than seventy-eight percent of the price of purchase, but not at the point the borrower's equity gets to higher than twenty-two percent. (Certain "higher risk" mortgage loans are not included.) The good news is that you can cancel your PMI yourself (for a mortgage that closed past July '99), regardless of the original purchase price, after the equity climbs to twenty percent.

Verify the numbers

Review your monthly statements often. You'll want to be aware of the prices of the houses that are selling in your neighborhood. Unfortunately, if yours is a recent mortgage loan - five years or under, you probably haven't had a chance to pay a lot of the principal: you have been paying mostly interest.

Verify Eligibility

You can begin the process of canceling your PMI at the time you're sure your equity reaches 20%. You will need to notify your mortgage lender that you want to cancel PMI. Next, you will be asked to submit documentation that you are eligible to cancel. Usually lenders ask for a state certified appraisal documented on the form: URAR-1004 (Uniform Residential Appraisal Report) to determine your home's equity and eligibility for PMI cancellation.

Power Purchase Mortgage can answer questions about PMI and many others. Call us: (800)593-0143.

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