Goodbye, PMI!

Since 1999, lending institutions have been legally required to cancel a borrower's Private Mortgage Insurance (PMI) when his mortgage balance (for a loan made past July of that year) reaches less than seventy-eight percent of the price of purchase, but not at the point the loan's equity climbs to twenty-two percent or higher. (There are some loans that are not covered by this law -like some loans considered 'high risk'.) 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 price of purchase, after the equity reaches twenty percent.

Keep a record of payments

Familiarize yourself with your monthly statements to keep track of principal payments. Also stay aware of the price that other homes are being sold for in your neighborhood. You are paying mostly interest if your mortgage loan closed fewer than 5 years ago, so your principal most likely hasn't been reduced by much.

Verify Eligibility

You can start the process of PMI cancelation as soon as you're sure your equity reaches 20%. You will first let your lender know that you are requesting to cancel PMI. Next, you will be required to submit documentation that you have at least 20 percent equity. A state certified appraisal documented on the appropriate form (URAR-1004 - Uniform Residential Appraisal Report) will document your equity amount � and most lenders request one before they agree to cancel.

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