Make Private Mortgage Insurance a Thing of the Past

While lenders have been required (for loans closed after July '99) to cancel Private Mortgage Insurance (PMI) at the time the loan balance goes under 78% of the price of purchase, they do not have to cancel PMI automatically if the borrower's equity is more than 22%. (Some "higher risk" morgages are excluded.) However, you have the right to cancel PMI yourself (for loans made after July 1999) at the point your equity gets to 20 percent, no matter the original price of purchase.

Keep track of payments

Keep track of money going toward the principal. Also keep track of what other homes are being sold for in your neighborhood. You've been paying mostly interest if your closing was fewer than 5 years ago, so your principal most likely hasn't gone down much.

Proof of Equity

At the point you determine you have achieved at least 20 percent equity in your home, you can begin the process of getting PMI out of your budget. Call the lending institution to request cancellation of PMI. Then you will be required to verify that you have at least 20 percent equity. A state certified appraisal using the appropriate form (URAR-1004 - Uniform Residential Appraisal Report) will be all the proof you need � and almost all lenders require one before they agree to cancel.

Mutual Security Mortgage can help find out if you can eliminate your PMI. Give us a call at 3039317879.

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