Make Private Mortgage Insurance a Thing of the Past

Since 1999, lending institutions have been legally obligated to cancel a borrower's Private Mortgage Insurance (PMI) at the point his mortgage balance (for loans made past July of that year) goes below seventy-eight percent of the purchase price, but not when the loan's equity reaches more than twenty-two percent. (This legal requirment does not cover a number of higher risk mortgages.) However, if your equity gets to 20% (regardless of the original price of purchase), you can cancel your PMI (for a mortgage loan that after July 1999).

Verify the numbers

Analyze your statements often. Pay attention to the purchase prices of other homes in your immediate area. Unfortunately, if you have a new mortgage - five years or under, you likely haven't started to pay a lot of the principal: you are paying mostly interest.

Verify Equity Amount

At the point your equity has reached the required twenty percent, you are close to canceling your PMI payments, for the life of your loan. You will need to notify your mortgage lender that you wish to cancel PMI payments. Your lender will require documentation that your equity is high enough. A state certified appraisal using the appropriate form (URAR-1004 - Uniform Residential Appraisal Report) documents your equity amount � and almost all lenders require one before they agree to cancel PMI.

America's Money Source can answer questions about PMI and many others. Call us at 4078987559.