Goodbye, PMI!

For loans made since July 1999, lending institutions are obligated (by federal law) to automatically cancel Private Mortgage Insurance (PMI) when the loan balance goes lower than 78 percent of your purchase price � but not at the point the loan reaches 22 percent equity. (There are exceptions -like some "high risk' loans.) However, if your equity gets to 20% (no matter what the original purchase price was), you have the legal right to cancel PMI (for a mortgage loan closed after July 1999).

Do your homework

Keep track of money going toward the principal. Find out the prices of other homes in your immediate area. Unfortunately, if yours is a new mortgage loan - five years or under, you probably haven't started to pay much of the principal: you have been paying mostly interest.

Verify Eligibility

When you find you've reached 20 percent equity in your home, you can start the process of freeing yourself from PMI payments. You will first let your lending institution know that you are asking to cancel your PMI. Your lender will request documentation that your equity is at 20 percent or above. Most lenders ask for a state certified appraisal documented on the form: URAR-1004 (Uniform Residential Appraisal Report) to determine your home's equity and eligibility for PMI cancellation.

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