Make Private Mortgage Insurance a Thing of the Past

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For loans made since July 1999, lending institutions are obligated (by federal law) to automatically cancel Private Mortgage Insurance (PMI) when the balance of the loan goes under 78 percent of the purchase price - but not at the point the loan reaches 22 percent equity. (There are some exceptions -like a number of "high risk' loans.) The good news is that you can cancel your PMI yourself (for your loan that closed after July '99), without considering the original price of purchase, once the equity climbs to twenty percent.

Do your homework

Analyze your loan statements often. Find out the selling prices of other houses in your immediate area. You've been paying mostly interest if your closing was fewer than 5 years ago, so your principal probably hasn't lowered much.

Proof of Equity

You can begin the process of canceling PMI when you determine your equity reaches 20%. Contact the lending institution to request cancellation of your Private Mortgage Insurance. The lending institution will require documentation that your equity is high enough. A state certified appraisal documented on the appropriate form (URAR-1004 - Uniform Residential Appraisal Report) is all the proof you need - and your lender will probably request one before they'll cancel PMI.

At Premier Nationwide Lending, we answer questions about PMI every day. Give us a call: (926) 228-1944.