Make Private Mortgage Insurance a Thing of the Past

Since 1999, lending institutions have been legally obligated to cancel a borrower's Private Mortgage Insurance (PMI) when his mortgage balance (for loans closed after July of that year) goes below seventy-eight percent of the purchase price, but not at the point the borrower's equity reaches over twenty-two percent. (There are exceptions -like some "high risk' loans.) But if your equity reaches 20% (regardless of the original purchase price), you have the right to cancel PMI (for a mortgage closed after July 1999).

Keep track of payments

Review your mortgage statements often. You'll want to keep track of the prices of the homes that are selling in your neighborhood. Unfortunately, if yours is a new mortgage loan - five years or under, you probably haven't begun to pay much of the principal: you are paying mostly interest.

The Proof is in the Appraisal

Once your equity has risen to the required twenty percent, you are not far away from canceling your PMI payments, once and for all. You will need to call your lender to alert them that you wish to cancel PMI. Your lender will require proof that your equity is high enough. The best proof there is can be found in a state certified appraisal on form URAR-1004 (Uniform Residential Appraisal Report), which is required by most lenders before canceling PMI.

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

BeneGroup, Inc.

1999 South Bascom Avenue Suite 700
Campbell, CA 95008