Make Private Mortgage Insurance a Thing of the Past

For loans closed since July 1999, lenders are obligated (by federal law) to automatically cancel Private Mortgage Insurance (PMI) when the balance of the loan goes below 78 percent of your purchase amount � but not at the point the loan reaches 22 percent equity. (The legal obligation does not apply to certain higher risk mortgages.) The good news is that you can cancel your PMI yourself (for your loan that closed past July '99), no matter the original purchase price, when your equity gets to twenty percent.

Keep a record of payments

Analyze your statements often. Make yourself aware of the purchase prices of other homes in your immediate area. If your mortgage is under five years old, probably you haven't greatly reduced principal � you have paid mostly interest.

Proof of Equity

Once you find you have reached 20 percent equity, you can begin the process of freeing yourself from PMI payments. You will need to call the lender to alert them that you want to cancel PMI. Your lender will request documentation that your equity is at 20 percent or above. You can acquire proof of your home's equity by getting a state certified appraisal on form URAR-1004 (Uniform Residential Appraisal Report), which is required by most lenders before canceling PMI.

Boardwalk Mortgage can answer questions about PMI and many others. Give us a call: 1-800-606-2794.