Goodbye, PMI!

Since 1999, lenders have been legally required to cancel a borrower's Private Mortgage Insurance (PMI) when his mortgage balance (for loans made past July of that year) goes down below seventy-eight percent of the purchase price, but not when the borrower's equity reaches over twenty-two percent. (The law does not include certain higher risk mortgages.) However, if your equity gets to 20% (regardless of the original price of purchase), you have the right to cancel the PMI (for a mortgage loan that after July 1999).

Keep track of payments

Familiarize yourself with your mortgage statements to keep your eye on principal payments. Also stay aware of what other homes are selling for in your neighborhood. If your mortgage is fewer than five years old, chances are you haven't made much progress with the principal � it's been mostly interest.

Verify Eligibility

You can start the process of PMI cancelation as soon as you're sure your equity has risen to 20%. You will need to notify your mortgage lender that you want to cancel PMI payments. Your lender will require proof that your equity is at 20 percent or above. The best proof there is can be found in a state certified appraisal using form URAR-1004 (Uniform Residential Appraisal Report), which is required by most lenders before canceling PMI.

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