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Goodbye, PMI!

Since 1999, lenders have been obligated to cancel a borrower's Private Mortgage Insurance (PMI) when his mortgage balance (for a loan made after July of '99) reaches less than seventy-eight percent of the price of purchase, but not at the time the loan's equity reaches twenty-two percent or higher. (Certain "higher risk" loan programs are not included.) But if your equity rises to 20% (regardless of the original price of purchase), you can cancel the PMI (for a mortgage loan closed past July 1999).

Verify the numbers

Keep track of money going toward the principal. Also be aware of the price that other homes are selling for in your neighborhood. If your loan is under five years old, it's likely you haven't made much progress with the principal � you have been paying mostly interest.

Verify Equity Amount

Once your equity has reached the desired twenty percent, you are just a few steps away from canceling your PMI payments, for the life of your loan. You will need to call your lending institution to let them know that you wish to cancel PMI. Your lender will request documentation that your equity is high enough. Most lenders require a state certified appraisal documented on the form: URAR-1004 (Uniform Residential Appraisal Report) to verify your equity and eligibility for PMI cancellation.

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

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