Make Private Mortgage Insurance a Thing of the Past

Since 1999, lenders have been legally required to cancel a borrower's Private Mortgage Insurance (PMI) at the point his loan balance (for a loan closed after July of that year) reaches less than seventy-eight percent of the purchase price, but not at the time the loan's equity reaches over twenty-two percent. (There are some loans that are excluded -like some loans considered 'high risk'.) The good news is that you can cancel your PMI yourself (for a mortgage loan closing after July '99), regardless of the original price of purchase, once the equity reaches twenty percent.

Verify the numbers

Familiarize yourself with your loan statements to keep a running total of principal payments. Find out the prices of other homes in your immediate area. You've been paying mostly interest if your loan closed fewer than 5 years ago, so your principal probably hasn't been reduced by much.

The Proof is in the Appraisal

You can begin the process of canceling PMI at the time you're sure your equity reaches 20%. First you will let your lender know that you are requesting to cancel PMI. Then you will be asked to verify that you have at least 20 percent equity. 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.

Absolute Mortgage, a Division of Finance of America Mortgage, LLC can help find out if you can eliminate your PMI. Call us at 253-848-1255.

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