Goodbye, PMI!

Although lenders have been obligated (for loans closed past July '99) to cancel Private Mortgage Insurance (PMI) at the point the balance gets below 78% of the purchase price, they do not have to cancel PMI automatically if the equity is over 22%. (There are some loans that are not covered by this law -like some loans considered 'high risk'.) However, if your equity rises to 20% (regardless of the original price of purchase), you can cancel your PMI (for a loan closed past July 1999).

Verify the numbers

Familiarize yourself with your mortgage statements to keep your eye on principal payments. Make yourself aware of the purchase prices of other houses in your immediate area. Unfortunately, if yours is a recent loan - five years or under, you probably haven't been able to pay much of the principal: you are paying mostly interest.

The Proof is in the Appraisal

At the point you find you have reached 20 percent equity, you can start the process of freeing yourself from PMI payments. You will need to notify your mortgage lender that you wish to cancel PMI payments. The lending institution will ask for proof that your equity is at 20 percent or above. A state certified appraisal documented on the appropriate form (URAR-1004 - Uniform Residential Appraisal Report) is all the proof you need � and your lender will probably request one before they'll cancel PMI.

BeneGroup, Inc. can help find out if you can eliminate your PMI. Give us a call: 4083956018.