Eliminating Private Mortgage Insurance

Beginning in 1999, lenders have been legally required to cancel a borrower's Private Mortgage Insurance (PMI) at the point his mortgage balance (for a loan closed after July of that year) reaches less than seventy-eight percent of the price of purchase, but not at the time the loan's equity climbs to over twenty-two percent. (There are exceptions -like some loans considered 'high risk'.) The good news is that you can request cancelation of your PMI yourself (for a loan that closed past July '99), without considering the original purchase price, once the equity rises to twenty percent.

Keep a running total of payments

Keep track of money going toward the principal. Pay attention to the selling prices of other houses in your neighborhood. If your mortgage is fewer than five years old, it's likely you haven't paid down much principal � you have been paying mostly interest.

The Proof is in the Appraisal

You can begin the process of PMI cancelation at the time you're sure your equity has reached 20%. Contact your lending institution to request cancellation of PMI. Lending institutions require proof of eligibility at this point. The best proof there is can be found in a state certified appraisal using form URAR-1004 (Uniform Residential Appraisal Report), required by most lenders before canceling PMI.

Valley Savers Mortgage, LLC can help find out if you can eliminate your PMI. Call us at (602) 332-9544.

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