Goodbye, PMI!

Since 1999, lending institutions have been legally required to cancel a borrower's Private Mortgage Insurance (PMI) when his mortgage balance (for loans closed past July of '99) reaches less than seventy-eight percent of the price of purchase, but not at the point the borrower's equity gets to over twenty-two percent. (The legal obligation does not cover some higher risk mortgages.) However, if your equity gets to 20% (regardless of the original price of purchase), you can cancel PMI (for a mortgage loan closed after July 1999).

Verify the numbers

Analyze your statements often. You'll want to stay aware of the the purchase amounts of the houses that sell around you. If your mortgage is fewer than five years old, probably you haven't made much progress with the principal � it's been mostly interest.

Proof of Equity

At the point your equity has risen to the required twenty percent, you are close to getting rid of your PMI payments, once and for all. You will first notify your lender that you are asking to cancel PMI. Your lender will require proof that your equity is high enough. You can get documentation of your equity by getting a state certified appraisal using form URAR-1004 (Uniform Residential Appraisal Report), required by most lending institutions before canceling PMI.

Nationwide Home Loans can help find out if you can eliminate your PMI. Give us a call at (562) 693-5048.

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