Make Private Mortgage Insurance a Thing of the Past

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Since 1999, lenders have been legally obligated to cancel a borrower's Private Mortgage Insurance (PMI) at the point his mortgage balance (for loans made after July of '99) reaches less than seventy-eight percent of the price of purchase, but not when the loan's equity reaches twenty-two percent or more. (There are exceptions -like some loans considered 'high risk'.) But you have the right to cancel PMI yourself (for mortgage loans made past July 1999) at the point your equity rises to 20 percent, no matter the original purchase price.

Keep a record of payments

Familiarize yourself with your mortgage statements to keep your eye on principal payments. You'll want to stay aware of the the purchase amounts of the homes that sell around you. If your mortgage is fewer than five years old, chances are you haven't made much progress with the principal - it's been mostly interest.

Verify Equity Amount

You can begin the process of canceling your PMI when you're sure your equity has reached 20%. You will need to call your mortgage lender to alert them that you want to cancel PMI payments. Lenders ask for proof of eligibility at this point. A state certified appraisal using the appropriate form (URAR-1004 - Uniform Residential Appraisal Report) is all the proof you need - and most lenders request one before they agree to cancel PMI.

Tyler Home Mortgage can answer questions about PMI and many others. Call us at (903) 630-7049.

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