Canceling Private Mortgage Insurance

For loans made since July 1999, lenders are obligated (by federal law) to automatically cancel Private Mortgage Insurance (PMI) when the loan balance gets lower than 78 percent of your purchase amount � but not when the loan reaches 22 percent equity. (There are some exceptions -like some loans considered 'high risk'.) The good news is that you can cancel your PMI yourself (for a mortgage loan that closed past July '99), no matter the original purchase price, after your equity rises to twenty percent.

Verify the numbers

Keep track of your principal payments. You'll want to keep track of the the purchase prices of the houses that are selling around you. You've been paying mostly interest if the closing was fewer than 5 years ago, so your principal most likely hasn't lowered much.

The Proof is in the Appraisal

When you think you've reached 20 percent equity in your home, you can start the process of getting PMI out of your budget. Contact the lender to ask for cancellation of your PMI. Then you will be required to verify that you are eligible to cancel. A state certified appraisal using the appropriate form (URAR-1004 - Uniform Residential Appraisal Report) is the best proof there is � and most lending institutions will require one before they agree to cancel.

Universal Lending Services, Inc. can help find out if you can eliminate your PMI. Give us a call: (337) 264-9990.

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