Goodbye, PMI!

Although lending institutions have been legally required (for loans closed after July 1999) to cancel Private Mortgage Insurance (PMI) at the point the loan balance dips under 78% of the price of purchase, they do not have to take similar action if the loan's equity is above 22%. (Certain "higher risk" morgages are not included.) However, you can actually cancel PMI yourself (for mortgages made after July 1999) once your equity reaches 20 percent, regardless of the original price of purchase.

Keep track of payments

Keep track of money going toward the principal. Find out the prices of other homes in your immediate area. Unfortunately, if yours is a new mortgage - five years or fewer, you likely haven't had a chance to pay a lot of the principal: you are paying mostly interest.

Verify Eligibility

As soon as your equity has reached the magic number of twenty percent, you are close to canceling your PMI payments, once and for all. Call your lending institution to request cancellation of your PMI. Then you will be asked to submit documentation 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 require one before they agree to cancel PMI.

Price Mortgage Group LLC can help find out if you can eliminate your PMI. Call us: 405-513-7700.

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