Make Private Mortgage Insurance a Thing of the Past

Since 1999, lenders have been legally required to cancel a borrower's Private Mortgage Insurance (PMI) at the point his mortgage balance (for loans made after July of '99) reaches less than seventy-eight percent of the price of purchase, but not when the loan's equity climbs to twenty-two percent or higher. (Certain "higher risk" loans are excluded.) The good news is that you can cancel your PMI yourself (for your mortgage closing after July '99), without considering the original purchase price, when your equity gets to twenty percent.

Verify the numbers

Familiarize yourself with your loan statements to keep track of principal payments. Also stay aware of what other homes are selling for in your neighborhood. If your loan is fewer than five years old, it's likely you haven't paid down much principal � it's been mostly interest.

The Proof is in the Appraisal

At the point you determine you have reached 20 percent equity in your home, you can start the process of getting PMI out of your budget. Contact the lending institution to request cancellation of PMI. Lenders request paperwork verifying your eligibility at this point. You can get proof of your home's equity by getting a state certified appraisal on form URAR-1004 (Uniform Residential Appraisal Report), required by most lenders before canceling PMI.

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