Make Private Mortgage Insurance a Thing of the Past

For loans closed after July 1999, lending institutions are required (by federal law) to automatically cancel Private Mortgage Insurance (PMI) when the balance of the loan goes lower than 78 percent of the purchase amount � but not at the point the borrower earns 22 percent equity. (There are some loans that are not covered by this law -like some loans considered 'high risk'.) The good news is that you can cancel your PMI yourself (for a mortgage closing after July '99), no matter the original purchase price, once the equity reaches twenty percent.

Do your homework

Familiarize yourself with your loan statements to keep your eye on principal payments. You'll want to stay aware of the prices of the houses that are selling in your neighborhood. If your mortgage is under five years old, probably you haven't greatly reduced principal � you have been paying mostly interest.

The Proof is in the Appraisal

You can start the process of canceling PMI when you determine your equity reaches 20%. You will need to notify your mortgage lender that you want to cancel PMI. Next, you will be required to submit documentation that you are eligible to cancel. Most lenders require a state certified appraisal documented on the form: URAR-1004 (Uniform Residential Appraisal Report) to determine your home's equity and eligibility for canceling PMI.

MidTowne Mortgage can help find out if you can eliminate your PMI. Call us: 4787462063.

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