Goodbye, PMI!

Although lending institutions have been legally required (for loans closed past July '99) to cancel Private Mortgage Insurance (PMI) at the point the mortgage balance dips under 78% of the price of purchase, they do not have to cancel PMI automatically if the borrower's equity is more than 22%. (The law does not include some higher risk mortgages.) The good news is that you can request cancelation of your PMI yourself (for a loan closing past July '99), no matter the original price of purchase, when the equity reaches twenty percent.

Keep a running total of payments

Keep track of your principal payments. Find out the selling prices of other houses in your neighborhood. Unfortunately, if you have a recent mortgage loan - five years or under, you probably haven't been able to pay very much of the principal: you have been paying mostly interest.

Proof of Equity

You can begin the process of PMI cancelation when you're sure your equity has reached 20%. You will first let your lender know that you are requesting to cancel PMI. Then you will be asked to verify that you are eligible to cancel. A state certified appraisal documented on the appropriate form (URAR-1004 - Uniform Residential Appraisal Report) will be all the proof you need � and almost all lending institutions will require one before they agree to cancel.

Selectplus Lending can answer questions about PMI and many others. Give us a call: (818)645-7035.

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