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 closed 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 climbs to over twenty-two percent. (Certain "higher risk" loans are not included.) However, if your equity gets to 20% (no matter what the original price was), you have the right to cancel your PMI (for a loan closed past July 1999).

Verify the numbers

Keep track of money going toward the principal. You'll want to be aware of the the purchase prices of the houses that are selling in your neighborhood. You are paying mostly interest if your mortgage closed fewer than 5 years ago, so your principal most likely hasn't been reduced by much.

The Proof is in the Appraisal

At the point your equity has risen to the magic number of twenty percent, you are close to canceling your PMI payments, once and for all. You will need to notify your mortgage lender that you wish to cancel PMI. Your lender will ask for proof that your equity is high enough. You can acquire documentation of your equity by getting a state certified appraisal using 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.