Goodbye, PMI!

While lenders have been required (for loans closed past July '99) to cancel Private Mortgage Insurance (PMI) when the mortgage balance goes under 78% of the purchase price, they do not have to take similar action if the equity is above 22%. (This legal requirment does not include certain higher risk mortgages.) But you have the right to cancel PMI yourself (for loans made after July 1999) at the point your equity rises to 20 percent, without consideration of the original purchase price.

Do your homework

Keep a running total of your principal payments. You'll want to keep track of the the purchase amounts of the homes that are selling in your neighborhood. If your mortgage is fewer than five years old, chances are you haven't made much progress with the principal � it's been mostly interest.

The Proof is in the Appraisal

You can begin the process of canceling your PMI when you determine your equity has reached 20%. You will need to contact the lender to alert them that you want to cancel PMI. Your lender will request 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 lending institutions before canceling PMI.

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