Canceling Private Mortgage Insurance

Since 1999, lending institutions have been required to cancel a borrower's Private Mortgage Insurance (PMI) at the point his mortgage balance (for a loan closed past July of that year) reaches less than seventy-eight percent of the price of purchase, but not when the loan's equity gets to over twenty-two percent. (A number of "higher risk" morgages are excluded.) However, you can actually cancel PMI yourself (for mortgages made past July 1999) once your equity gets to 20 percent, without consideration of the original purchase price.

Keep a record of payments

Keep track of money going toward the principal. Also keep track of what other homes are purchased for in your neighborhood. You are paying mostly interest if the closing was fewer than 5 years ago, so your principal probably hasn't gone down much.

Proof of Equity

You can begin the process of PMI cancelation at the time you you think that your equity reaches 20%. You will need to call your lender to let them know that you want to cancel PMI payments. Next, you will be asked to submit proof that you have at least 20 percent equity. You can acquire documentation of your home's equity by getting a state certified appraisal using form URAR-1004 (Uniform Residential Appraisal Report), which is required by most lenders before canceling PMI.

At Amity Mortgage LLC, we answer questions about PMI every day. Give us a call at 2037296681.

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185 Meadow St
Naugatuck, CT 06770