Make Private Mortgage Insurance a Thing of the Past

Beginning in 1999, lenders have been legally required to cancel a borrower's Private Mortgage Insurance (PMI) at the point his mortgage balance (for loans closed past July of '99) reaches less than seventy-eight percent of the price of purchase, but not when the borrower's equity gets to twenty-two percent or higher. (Some "higher risk" morgages are not included.) However, you can actually cancel PMI yourself (for mortgages closed past July 1999) when your equity gets to 20 percent, regardless of the original purchase price.

Keep track of payments

Study your mortgage statements often. Also keep track of what other homes are being sold for in your neighborhood. If your mortgage is under five years old, probably you haven't greatly reduced principal � you have paid mostly interest.

Proof of Equity

You can start the process of canceling your PMI at the time you you think that your equity reaches 20%. Call your lending institution to ask for cancellation of PMI. The lending institution will require documentation that your equity is high enough. You can get documentation of your equity by getting a state certified appraisal on form URAR-1004 (Uniform Residential Appraisal Report), required by most lending institutions before canceling PMI.

At BeneGroup, Inc., we answer questions about PMI every day. Call us at 4083956018.