Eliminating Private Mortgage Insurance

For loans made since July 1999, lending institutions are required (by federal law) to automatically cancel Private Mortgage Insurance (PMI) when the loan balance gets below 78 percent of the purchase amount � but not at the point the borrower achieves 22 percent equity. (Some "higher risk" mortgage loans are excluded.) But 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.

Do your homework

Keep a running total of money going toward the principal. You'll want to be aware of the the purchase amounts of the homes that sell around you. If your mortgage is fewer than five years old, chances are you haven't greatly reduced principal � you have paid mostly interest.

Verify Eligibility

At the point your equity has risen to the desired twenty percent, you are just a few steps away from getting rid of your PMI payments, for the life of your loan. You will need to call your lender to alert them that you wish to cancel PMI payments. Lending institutions ask for documentation verifying your eligibility at this point. The best proof there is can be found in a state certified appraisal on form URAR-1004 (Uniform Residential Appraisal Report), which is required by most lending institutions before canceling PMI.

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