Eliminating Private Mortgage Insurance

For loans closed after July 1999, lending institutions are obligated (by federal law) to automatically cancel Private Mortgage Insurance (PMI) when the balance of the loan goes below 78 percent of the purchase amount � but not at the point the loan reaches 22 percent equity. (Certain "higher risk" loan programs are excluded.) The good news is that you can request cancelation of your PMI yourself (for a mortgage that closed after July '99), no matter the original purchase price, after your equity reaches twenty percent.

Keep track of payments

Keep track of each principal payment. You'll want to keep track of the the purchase amounts of the houses that sell around you. You are paying mostly interest if you closed your mortgage loan fewer than 5 years ago, so your principal most likely hasn't been reduced by much.

Verify Equity Amount

At the point your equity has risen to the desired twenty percent, you are not far away from canceling your PMI payments, once and for all. Contact your lender to ask for cancellation of PMI. Next, you will be asked to submit proof that you have at least 20 percent equity. Most 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 answer questions about PMI and many others. Call us: (941) 366-5800.