Make Private Mortgage Insurance a Thing of the Past

Although lenders have been legally required (for loans closed past July 1999) to cancel Private Mortgage Insurance (PMI) at the point the loan balance gets under 78% of the price of purchase, they do not have to cancel automatically if the loan's equity is more than 22%. (This legal requirment does not include a number of higher risk mortgages.) The good news is that you can request cancelation of your PMI yourself (for a mortgage loan closing after July '99), regardless of the original purchase price, when your equity rises to twenty percent.

Do your homework

Study your mortgage statements often. Also be aware of what other homes are being sold for in your neighborhood. You are paying mostly interest if your mortgage loan closed fewer than 5 years ago, so your principal most likely hasn't been reduced by much.

Verify Eligibility

At the point you think you have achieved at least 20 percent equity, you can begin the process of getting PMI out of your budget. Call the lender to ask for cancellation of your PMI. Lenders require paperwork verifying your eligibility at this point. The best proof there is can be found in a state certified appraisal using form URAR-1004 (Uniform Residential Appraisal Report), which is required by most lending institutions before canceling PMI.

Boardwalk Mortgage can answer questions about PMI and many others. Call us at 1-800-606-2794.