Goodbye, PMI!

Since 1999, lending institutions have been required to cancel a borrower's Private Mortgage Insurance (PMI) at the point his mortgage balance (for loans closed past July of that year) goes down below seventy-eight percent of the price of purchase, but not when the loan's equity reaches twenty-two percent or higher. (Certain "higher risk" loan programs are excluded.) The good news is that you can request cancelation of your PMI yourself (for your mortgage that closed past July '99), without considering the original purchase price, at the point the equity climbs to twenty percent.

Do your homework

Keep a running total of money going toward the principal. You'll want to keep track of the the purchase prices of the homes that sell in your neighborhood. You are paying mostly interest if your mortgage closed fewer than 5 years ago, so your principal probably hasn't gone down much.

Proof of Equity

Once your equity has reached the required twenty percent, you are close to canceling your PMI payments, for the life of your loan. You will first let your lender know that you are asking to cancel PMI. Then you will be asked to submit proof that you are eligible to cancel. A state certified appraisal documented on the appropriate form (URAR-1004 - Uniform Residential Appraisal Report) is the best proof there is ? and almost all lenders will require one before they agree to cancel PMI.

Community Home Mortgage can help find out if you can eliminate your PMI. Call us at 9167819999.