Goodbye, PMI!

Beginning in 1999, lending institutions have been required to cancel a borrower's Private Mortgage Insurance (PMI) at the point his mortgage balance (for loans made after July of '99) goes under seventy-eight percent of the price of purchase, but not when the borrower's equity climbs to twenty-two percent or more. (This legal requirment does not include certain higher risk mortgages.) The good news is that you can request cancelation of your PMI yourself (for your loan that closed past July '99), without considering the original price of purchase, when the equity reaches twenty percent.

Keep a running total of payments

Study your statements often. Also be aware of the price that other homes are purchased for in your neighborhood. Unfortunately, if you have a new loan - five years or under, you probably haven't been able to pay very much of the principal: you have been paying mostly interest.

Verify Equity Amount

Once you think you have achieved at least 20 percent equity, you can begin the process of canceling your Private Mortgage Insurance. You will need to notify your mortgage lender that you want to cancel PMI payments. Then you will be required to submit proof that you are eligible to cancel. You can acquire documentation of your home's equity by getting a state certified appraisal using form URAR-1004 (Uniform Residential Appraisal Report), required by most lenders before canceling PMI.

At New Millennium Mortgage Co. NMLS: 331173, we answer questions about PMI every day. Give us a call at (941) 366-5800.