Make Private Mortgage Insurance a Thing of the Past

Beginning in 1999, lending institutions have been required to cancel a borrower's Private Mortgage Insurance (PMI) at the point his mortgage balance (for a loan made past July of that year) reaches less than seventy-eight percent of the price of purchase, but not at the point the loan's equity gets to over twenty-two percent. (The law does not apply to some higher risk mortgages.) But if your equity gets to 20% (regardless of the original price of purchase), you have the legal right to cancel your PMI (for a mortgage loan closed past July 1999).

Do your homework

Keep track of money going toward the principal. Pay attention to the prices of other homes in your immediate area. Unfortunately, if yours is a new mortgage loan - five years or under, you likely haven't had a chance to pay a lot of the principal: you have been paying mostly interest.

Proof of Equity

At the point your equity has risen to the required twenty percent, you are close to stopping your PMI payments, once and for all. Contact the lending institution to request cancellation of your PMI. The lending institution will require documentation that your equity is high enough. A state certified appraisal using the appropriate form (URAR-1004 - Uniform Residential Appraisal Report) will document your equity amount � and your lender will probably require one before they agree to cancel PMI.

Boardwalk Mortgage can help find out if you can eliminate your PMI. Call us: 1-800-606-2794.