Goodbye, PMI!

While lending institutions have been legally required (for loans closed past July '99) to cancel Private Mortgage Insurance (PMI) at the point the mortgage balance gets below 78% of the purchase price, they do not have to take similar action if the loan's equity is over 22%. (A number of "higher risk" morgages are excluded.) However, you are able to cancel PMI yourself (for loans closed past July 1999) at the point your equity reaches 20 percent, without consideration of the original price of purchase.

Do your homework

Keep track of money going toward the principal. Also keep track of how much other homes are being sold for in your neighborhood. Unfortunately, if yours is a recent mortgage loan - five years or under, you probably haven't begun to pay a lot of the principal: you have been paying mostly interest.

The Proof is in the Appraisal

As soon as your equity has risen to the required twenty percent, you are close to stopping your PMI payments, once and for all. You will first let your lender know that you are asking to cancel PMI. Your lender will require documentation that your equity is at 20 percent or above. A state certified appraisal using the appropriate form (URAR-1004 - Uniform Residential Appraisal Report) is the best proof there is � and your lender will probably require one before they'll cancel PMI.

Price Mortgage Group LLC can answer questions about PMI and many others. Give us a call: 405-513-7700.

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