Make Private Mortgage Insurance a Thing of the Past

Beginning in 1999, lenders have been required to cancel a borrower's Private Mortgage Insurance (PMI) when his loan balance (for loans closed past July of that year) goes under seventy-eight percent of the price of purchase, but not at the time the loan's equity reaches more than twenty-two percent. (There are exceptions -like some loans considered 'high risk'.) But you have the right to cancel PMI yourself (for loans closed past July 1999) once your equity rises to 20 percent, no matter the original price of purchase.

Do your homework

Keep a running total of each principal payment. Make yourself aware of the prices of other houses in your immediate area. If your mortgage is under five years old, probably you haven't made much progress with the principal � you have been paying mostly interest.

Proof of Equity

Once your equity has risen to the required twenty percent, you are just a few steps away from canceling your PMI payments, once and for all. Call the lending institution to request cancellation of your Private Mortgage Insurance. Lending institutions ask for documentation verifying your eligibility at this point. 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 PMI cancellation.

U.S.A. Lending, Inc. can answer questions about PMI and many others. Give us a call at 305-967-7200.