Make Private Mortgage Insurance a Thing of the Past

Beginning in 1999, lenders have been legally obligated to cancel a borrower's Private Mortgage Insurance (PMI) when his loan balance (for loans closed after July of '99) goes beneath seventy-eight percent of the price of purchase, but not at the point the borrower's equity reaches more than twenty-two percent. (The legal requirment does not apply to certain higher risk mortgages.) However, if your equity rises to 20% (no matter what the original purchase price was), you have the right to cancel PMI (for a mortgage closed after July 1999).

Do your homework

Keep track of your principal payments. Find out the selling prices of other houses in your immediate area. You've been paying mostly interest if you closed your mortgage fewer than 5 years ago, so your principal probably hasn't been reduced by much.

Proof of Equity

You can start the process of canceling PMI when you're sure your equity reaches 20%. You will first tell your lender that you are requesting to cancel your PMI. The lending institution will require documentation that your equity is high enough. A state certified appraisal using the appropriate form (URAR-1004 - Uniform Residential Appraisal Report) will be all the proof you need � and most lending institutions will require one before they agree to cancel.

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