Make Private Mortgage Insurance a Thing of the Past

Although lenders have been legally obligated (for loans closed past July 1999) to cancel Private Mortgage Insurance (PMI) when the mortgage balance goes below 78% of the purchase price, they do not have to cancel automatically if the equity is over 22%. (Some "higher risk" morgages are excluded.) But you have the right to cancel PMI yourself (for loans closed after July 1999) when your equity gets to 20 percent, no matter the original price of purchase.

Verify the numbers

Review your statements often. Also be aware of the price that other homes are being sold for in your neighborhood. If your loan is fewer than five years old, it's likely you haven't greatly reduced principal � it's been mostly interest.

Proof of Equity

You can start the process of canceling PMI when you determine your equity reaches 20%. You will need to notify your mortgage lender that you wish to cancel PMI. Lending institutions ask for proof of eligibility at this point. Most lenders ask for a state certified appraisal documented on the form: URAR-1004 (Uniform Residential Appraisal Report) to determine your equity and eligibility for canceling PMI.

At Executive Lending Group, LLC, we answer questions about PMI every day. Give us a call: 8165258000.