Goodbye, PMI!

For loans closed since July 1999, lending institutions are obligated (by federal law) to automatically cancel Private Mortgage Insurance (PMI) when the balance of the loan gets below 78 percent of your purchase price � but not when the borrower achieves 22 percent equity. (There are some exceptions -like some loans considered 'high risk'.) However, you have the right to cancel PMI yourself (for mortgages closed after July 1999) at the point your equity reaches 20 percent, without consideration of the original price of purchase.

Keep a running total of payments

Review your statements often. Also keep track of the price that other homes are purchased for in your neighborhood. Unfortunately, if yours is a recent mortgage loan - five years or under, you likely haven't started to pay much of the principal: you are paying mostly interest.

The Proof is in the Appraisal

At the point your equity has risen to the magic number of twenty percent, you are close to canceling your PMI payments, once and for all. First you will notify your lender that you are requesting to cancel your PMI. Lenders require documentation verifying your eligibility at this point. You can acquire 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.

1st Credential Mortgage Inc can help find out if you can eliminate your PMI. Call us: (281) 778-0805.

Got a Question?

Do you have a question? We can help. Simply fill out the form below and we'll contact you with the answer, with no obligation to you. We guarantee your privacy.

Your Information
Your Question
By checking the box, you agree that 1st Credential Mortgage Inc may call/text you about your inquiry, which may involve use of automated means and prerecorded/artificial voices.. Message/data rates may apply.