Eliminating Private Mortgage Insurance

While lending institutions have been legally required (for loans closed after July 1999) to cancel Private Mortgage Insurance (PMI) at the time the mortgage balance goes under 78% of the purchase price, they do not have to take similar action if the loan's equity is more than 22%. (This legal requirment does not include a number of higher risk mortgages.) But you can actually cancel PMI yourself (for mortgage loans made past July 1999) at the point your equity rises to 20 percent, no matter the original purchase price.

Keep a running total of payments

Familiarize yourself with your mortgage statements to keep track of principal payments. Find out the purchase prices of other homes in your immediate area. Unfortunately, if you have a recent loan - five years or under, you probably haven't begun to pay much of the principal: you have been paying mostly interest.

The Proof is in the Appraisal

You can begin the process of PMI cancelation as soon as you're sure your equity has reached 20%. Contact the lender to ask for cancellation of PMI. Lending institutions require proof of eligibility at this point. You can get proof 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.

Nationwide Home Loans can help find out if you can eliminate your PMI. Give us a call at 5626935048.

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Nationwide Home Loans

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