Make Private Mortgage Insurance a Thing of the Past

Since 1999, lenders have been legally obligated to cancel a borrower's Private Mortgage Insurance (PMI) when his loan balance (for loans closed past July of that year) reaches less than seventy-eight percent of the purchase price, but not at the point the borrower's equity gets to over twenty-two percent. (Certain "higher risk" morgages are not included.) However, if your equity rises to 20% (no matter what the original price was), you can cancel your PMI (for a mortgage loan that past July 1999).

Do your homework

Study your mortgage statements often. You'll want to be aware of the the purchase amounts of the homes that sell in your neighborhood. Unfortunately, if yours is a recent mortgage loan - five years or fewer, you probably haven't had a chance to pay a lot of the principal: you have been paying mostly interest.

Verify Eligibility

Once your equity has reached the required twenty percent, you are not far away from canceling your PMI payments, for the life of your loan. You will need to notify your mortgage lender that you wish to cancel PMI payments. Your lender will ask for proof that your equity is at 20 percent or above. The best proof there is can be found in a state certified appraisal using form URAR-1004 (Uniform Residential Appraisal Report), which is required by most lenders before canceling PMI.

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

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