Make Private Mortgage Insurance a Thing of the Past

Although lending institutions have been legally obligated (for loans closed after July '99) to cancel Private Mortgage Insurance (PMI) at the point the mortgage balance gets below 78% of the price of purchase, they do not have to take similar action if the borrower's equity is above 22%. (There are exceptions -like certain "high risk' loans.) However, you can actually cancel PMI yourself (for loans made after July 1999) when your equity rises to 20 percent, no matter the original price of purchase.

Do your homework

Keep a running total of your principal payments. Also keep track of what other homes are selling for in your neighborhood. You've been paying mostly interest if you closed your mortgage loan fewer than 5 years ago, so your principal probably hasn't gone down much.

Verify Eligibility

Once your equity has risen to the desired twenty percent, you are not far away from stopping your PMI payments, for the life of your loan. You will need to notify your mortgage lender that you wish to cancel PMI. Your lender will request documentation that your equity is high enough. A state certified appraisal documented on the appropriate form (URAR-1004 - Uniform Residential Appraisal Report) is the best proof there is � and almost all lenders will require one before they agree to cancel.

Executive Lending Group, LLC can answer questions about PMI and many others. Give us a call at 8165258000.

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