Make Private Mortgage Insurance a Thing of the Past

Since 1999, lending institutions have been required to cancel a borrower's Private Mortgage Insurance (PMI) at the point his loan balance (for loans closed after July of '99) reaches less than seventy-eight percent of the purchase price, but not at the time the loan's equity climbs to more than twenty-two percent. (The law does not include a number of higher risk mortgages.) But you can actually cancel PMI yourself (for loans closed after July 1999) when your equity gets to 20 percent, without consideration of the original price of purchase.

Do your homework

Keep a running total of money going toward the principal. Pay attention to the selling prices of other homes in your neighborhood. You've been paying mostly interest if you closed your mortgage fewer than 5 years ago, so your principal most likely hasn't gone down much.

Proof of Equity

Once your equity has reached the magic number of twenty percent, you are close to stopping your PMI payments, once and for all. You will first tell your lender that you are asking to cancel PMI. The lending institution will require proof that your equity is at 20 percent or above. Usually lenders ask for a state certified appraisal documented on the form: URAR-1004 (Uniform Residential Appraisal Report) to verify your home's equity and eligibility for canceling PMI.

Executive Lending Group, LLC can help find out if you can eliminate your PMI. Call us at 8165258000.