Make Private Mortgage Insurance a Thing of the Past

Since 1999, lenders have been required to cancel a borrower's Private Mortgage Insurance (PMI) at the point his loan balance (for loans made past July of '99) goes below seventy-eight percent of the purchase price, but not at the point the borrower's equity reaches twenty-two percent or more. (The legal requirment does not apply to certain higher risk mortgages.) However, you can actually cancel PMI yourself (for mortgage loans made after July 1999) at the point your equity reaches 20 percent, regardless of the original purchase price.

Do your homework

Keep track of each principal payment. Also keep track of what other homes are purchased for in your neighborhood. You've been paying mostly interest if you closed your mortgage fewer than 5 years ago, so your principal most likely hasn't gone down much.

Verify Equity Amount

At the point you find you have reached 20 percent equity in your home, you can start the process of getting PMI out of your budget. Contact the lender to ask for cancellation of your PMI. Lenders ask for paperwork verifying your eligibility at this point. Usually lenders require a state certified appraisal documented on the form: URAR-1004 (Uniform Residential Appraisal Report) to verify your home's equity and eligibility for canceling PMI.

New Millennium Mortgage Co. NMLS: 331173 can help find out if you can eliminate your PMI. Give us a call at (941) 366-5800.