Goodbye, PMI!

For loans closed after July 1999, lending institutions are obligated (by federal law) to automatically cancel Private Mortgage Insurance (PMI) when the loan balance falls lower than 78 percent of your purchase amount � but not when the loan reaches 22 percent equity. (There are exceptions -like a number of "high risk' loans.) The good news is that you can request cancelation of your PMI yourself (for your mortgage closing after July '99), regardless of the original purchase price, when your equity climbs to twenty percent.

Keep a record of payments

Analyze your monthly statements often. Also keep track of the price that other homes are selling for in your neighborhood. If your loan is under five years old, probably you haven't greatly reduced principal � you have been paying mostly interest.

The Proof is in the Appraisal

You can begin the process of PMI cancelation at the time you calculate that your equity reaches 20%. You will first let your lending institution know that you are asking to cancel your PMI. The lending institution will request proof that your equity is high enough. A state certified appraisal using the appropriate form (URAR-1004 - Uniform Residential Appraisal Report) will document your equity amount � and your lender will probably request one before they'll cancel PMI.

Alternative Mortgage Group can help find out if you can eliminate your PMI. Give us a call at 561-395-4264.