Make Private Mortgage Insurance a Thing of the Past

Since 1999, lenders have been legally obligated to cancel a borrower's Private Mortgage Insurance (PMI) when his loan balance (for loans closed after July of that year) reaches less than seventy-eight percent of the purchase price, but not at the point the loan's equity climbs to over twenty-two percent. (This law does not cover some higher risk mortgages.) But you can actually cancel PMI yourself (for mortgages closed past July 1999) when your equity rises to 20 percent, without consideration of the original price of purchase.

Keep track of payments

Familiarize yourself with your loan statements to keep a running total of principal payments. Find out the selling prices of other houses in your neighborhood. Unfortunately, if you have a new mortgage loan - five years or under, you likely haven't had a chance to pay a lot of the principal: you have been paying mostly interest.

Verify Eligibility

When you determine you have reached 20 percent equity, you can start the process of canceling your Private Mortgage Insurance. Contact the lending institution to ask for cancellation of PMI. Next, you will be asked to submit proof that you are eligible to cancel. A state certified appraisal documented on the appropriate form (URAR-1004 - Uniform Residential Appraisal Report) is the best proof there is � and your lender will probably require one before they'll cancel PMI.

BeneGroup, Inc. can answer questions about PMI and many others. Call us: 4083956018.