Make Private Mortgage Insurance a Thing of the Past

For loans closed since July 1999, lenders are required (by federal law) to automatically cancel Private Mortgage Insurance (PMI) when the loan balance gets lower than 78 percent of the purchase amount � but not when the loan reaches 22 percent equity. (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 a mortgage loan that closed past July '99), without considering the original purchase price, after your equity gets to twenty percent.

Do your homework

Familiarize yourself with your monthly statements to keep your eye on principal payments. Also be aware of what other homes are being sold for in your neighborhood. If your mortgage is under five years old, it's likely you haven't made much progress with the principal � you have paid mostly interest.

Verify Eligibility

Once your equity has risen to the required twenty percent, you are just a few steps away from canceling your PMI payments, once and for all. You will first let your lending institution know that you are requesting to cancel your PMI. Lending institutions require paperwork verifying your eligibility at this point. 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 canceling PMI.

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