Make Private Mortgage Insurance a Thing of the Past

Although lending institutions have been required (for loans closed after July '99) to cancel Private Mortgage Insurance (PMI) when the balance gets under 78% of the price of purchase, they do not have to cancel PMI automatically if the loan's equity is more than 22%. (There are some exceptions -like some loans considered 'high risk'.) However, you are able to cancel PMI yourself (for mortgage loans closed after July 1999) once your equity reaches 20 percent, no matter the original purchase price.

Verify the numbers

Keep track of each principal payment. Also keep track of how much other homes are purchased for in your neighborhood. If your mortgage is fewer than five years old, chances are you haven't greatly reduced principal � it's been mostly interest.

Verify Eligibility

At the point you think you have reached 20 percent equity in your home, you can start the process of getting PMI out of your budget. You will need to call your lending institution to alert them that you want to cancel PMI. The lending institution will ask for proof that your equity is high enough. A state certified appraisal documented on the appropriate form (URAR-1004 - Uniform Residential Appraisal Report) is all the proof you need � 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. Call us at 561-395-4264.