Make Private Mortgage Insurance a Thing of the Past

Since 1999, lending institutions have been obligated to cancel a borrower's Private Mortgage Insurance (PMI) when his mortgage balance (for loans made after July of '99) reaches less than seventy-eight percent of the price of purchase, but not when the borrower's equity climbs to over twenty-two percent. (Certain "higher risk" mortgage loans are excluded.) But if your equity gets to 20% (regardless of the original purchase price), you have the right to cancel the PMI (for a mortgage closed after July 1999).

Do your homework

Familiarize yourself with your loan statements to keep track of principal payments. Find out the prices of other homes in your neighborhood. Unfortunately, if yours is a recent loan - five years or fewer, you probably haven't had a chance to pay very much of the principal: you have been paying mostly interest.

The Proof is in the Appraisal

As soon as your equity has reached 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 want to cancel PMI. Your lender will require documentation that your equity is at 20 percent or above. A state certified appraisal documented on the appropriate form (URAR-1004 - Uniform Residential Appraisal Report) verifies your equity amount � and your lender will probably require one before they'll cancel PMI.

Iltis Lending Group can help find out if you can eliminate your PMI. Give us a call: (941) 954-4252.