Make Private Mortgage Insurance a Thing of the Past

For loans made since July 1999, lenders are required (by federal law) to automatically cancel Private Mortgage Insurance (PMI) when the balance of the loan goes below 78 percent of your purchase amount � but not when the loan reaches 22 percent equity. (A number of "higher risk" mortgage loans are not included.) The good news is that you can request cancelation of your PMI yourself (for your mortgage closing past July '99), without considering the original purchase price, when your equity rises to twenty percent.

Keep track of payments

Familiarize yourself with your monthly statements to keep your eye on principal payments. Also keep track of what other homes are purchased for in your neighborhood. You are paying mostly interest if your loan closed fewer than 5 years ago, so your principal most likely hasn't been reduced by much.

Proof of Equity

When you think you have reached 20 percent equity, you can start the process of freeing yourself from PMI payments. Call your lending institution to request cancellation of your PMI. Next, you will be asked to verify that you are eligible to cancel. A state certified appraisal documented on the appropriate form (URAR-1004 - Uniform Residential Appraisal Report) verifies your equity amount � and your lender will probably request one before they'll cancel PMI.

Iltis Lending Group can answer questions about PMI and many others. Give us a call: (941) 954-4252.