Eliminating Private Mortgage Insurance

While lending institutions have been legally obligated (for loans closed past July '99) to cancel Private Mortgage Insurance (PMI) at the point the balance goes under 78% of the price of purchase, they do not have to cancel PMI automatically if the loan's equity is above 22%. (There are some exceptions -like certain "high risk' loans.) The good news is that you can request cancelation of your PMI yourself (for your mortgage loan that closed after July '99), no matter the original purchase price, at the point your equity reaches twenty percent.

Keep track of payments

Keep track of each principal payment. You'll want to be aware of the the purchase amounts of the homes that are selling in your neighborhood. If your loan is under five years old, chances are you haven't made much progress with the principal � you have paid mostly interest.

Proof of Equity

You can begin the process of PMI cancelation as soon as you calculate that your equity has reached 20%. You will first let your lending institution know that you are asking to cancel your PMI. Then you will be required to verify that you have at least 20 percent equity. Usually lenders ask for a state certified appraisal documented on the form: URAR-1004 (Uniform Residential Appraisal Report) to determine your equity and eligibility for canceling PMI.

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

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