Goodbye, PMI!

While lending institutions have been required (for loans closed past July '99) to cancel Private Mortgage Insurance (PMI) at the time the mortgage balance gets below 78% of the price of purchase, they do not have to take similar action if the loan's equity is over 22%. (This legal requirment does not include a number of higher risk mortgages.) However, if your equity reaches 20% (no matter what the original price was), you are able to cancel the PMI (for a loan that after July 1999).

Do your homework

Keep a running total of each principal payment. Make yourself aware of the selling prices of other houses in your neighborhood. Unfortunately, if yours is a new mortgage - five years or fewer, you probably haven't had a chance to pay very much of the principal: you have been paying mostly interest.

Proof of Equity

You can start the process of canceling PMI when you you think that your equity reaches 20%. You will need to call the lending institution to alert them that you wish to cancel PMI. Next, you will be required to submit proof that you have at least 20 percent equity. A state certified appraisal using the appropriate form (URAR-1004 - Uniform Residential Appraisal Report) is all the proof you need � and your lender will probably require one before they agree to cancel PMI.

Atlantic Financial Services can answer questions about PMI and many others. Give us a call at (732) 969-9300.

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