Goodbye, PMI!

Beginning in 1999, lenders have been obligated to cancel a borrower's Private Mortgage Insurance (PMI) at the point his mortgage balance (for loans made after July of that year) reaches less than seventy-eight percent of the price of purchase, but not at the point the borrower's equity reaches higher than twenty-two percent. (This law does not cover some higher risk mortgages.) However, if your equity rises to 20% (no matter what the original purchase price was), you are able to cancel PMI (for a loan that after July 1999).

Do your homework

Keep track of your principal payments. You'll want to keep track of the the purchase amounts of the houses that are selling around you. Unfortunately, if yours is a recent mortgage - five years or under, you likely haven't begun to pay very much of the principal: you are paying mostly interest.

Verify Eligibility

When 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. Next, you will be required to verify that you have at least 20 percent equity. The best proof there is can be found in a state certified appraisal on form URAR-1004 (Uniform Residential Appraisal Report), required by most lenders before canceling PMI.

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