Goodbye, PMI!

For loans made since July 1999, lending institutions are required (by federal law) to automatically cancel Private Mortgage Insurance (PMI) when the loan balance falls below 78 percent of your purchase price � but not when the loan reaches 22 percent equity. (Certain "higher risk" loans are excluded.) But if your equity rises to 20% (no matter what the original purchase price was), you are able to cancel PMI (for a mortgage closed past July 1999).

Keep track of payments

Familiarize yourself with your loan statements to keep a running total of principal payments. Also keep track of how much other homes are selling for in your neighborhood. Unfortunately, if you have a recent mortgage loan - five years or under, you likely haven't had a chance to pay much of the principal: you are paying mostly interest.

The Proof is in the Appraisal

When you find you've achieved at least 20 percent equity, you can begin the process of getting PMI out of your budget. Call your lender to request cancellation of your PMI. The lending institution will ask for documentation that your equity is high enough. A state certified appraisal using the appropriate form (URAR-1004 - Uniform Residential Appraisal Report) is the best proof there is � and your lender will probably require one before they'll cancel PMI.

Atlantic Financial Services can help find out if you can eliminate your PMI. Call us: (732) 969-9300.

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