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Goodbye, PMI!

While lending institutions have been required (for loans closed past July '99) to cancel Private Mortgage Insurance (PMI) at the time the balance gets below 78% of the purchase price, they do not have to cancel PMI automatically if the borrower's equity is above 22%. (The legal requirment does not include certain higher risk mortgages.) However, if your equity reaches 20% (regardless of the original purchase price), you are able to cancel your PMI (for a loan that past July 1999).

Keep track of payments

Familiarize yourself with your mortgage statements to keep your eye on principal payments. Find out the prices of other homes in your neighborhood. You've been paying mostly interest if your closing was fewer than 5 years ago, so your principal most likely hasn't been reduced by much.

Proof of Equity

Once you determine you have reached 20 percent equity, you can begin the process of freeing yourself from PMI payments. Contact your lending institution to request cancellation of PMI. Your lender will request documentation that your equity is high enough. Usually lenders require a state certified appraisal documented on the form: URAR-1004 (Uniform Residential Appraisal Report) to verify your equity and eligibility for canceling PMI.

Greystone Loans, Inc. can answer questions about PMI and many others. Give us a call at (909) 467-1090.

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