Make Private Mortgage Insurance a Thing of the Past

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Beginning in 1999, lending institutions have been obligated to cancel a borrower's Private Mortgage Insurance (PMI) when his primary residence mortgage balance (for a loan closed after July of that year) goes down below seventy-eight percent of the purchase price, but not at the point the borrower's equity reaches higher than twenty-two percent. (The legal obligation does not cover certain higher risk mortgages.) However, if your equity gets to 20% (regardless of the original price of purchase), you are able to apply to cancel PMI (for a mortgage loan that past July 1999).

Verify the numbers

Keep track of each principal payment. Also keep track of the price that other homes are being sold for in your neighborhood. If your mortgage is under five years old, chances are you haven't greatly reduced principal - it's been mostly interest.

Proof of Equity

You can begin the process of canceling your PMI at the time you determine your equity reaches 20%. Contact the servicer to ask for their cancellation policy of your Private Mortgage Insurance. They will request documentation that your equity is at 20 percent or above, usually requiring ask for a state certified appraisal documented on the form: URAR-1004 (Uniform Residential Appraisal Report) to determine your equity and eligibility for PMI cancellation.

Oak Mortgage Company, LLC can help find out if you can eliminate your PMI. Give us a call: (856) 988-8100 x6615.

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