Goodbye, PMI!

Although lending institutions have been legally obligated (for loans closed after July '99) to cancel Private Mortgage Insurance (PMI) at the time the mortgage balance gets under 78% of the price of purchase, they do not have to take similar action if the loan's equity is over 22%. (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 closing after July '99), no matter the original purchase price, after the equity reaches twenty percent.

Do your homework

Analyze your statements often. Pay attention to the selling prices of other houses in your immediate area. You are paying mostly interest if the closing was fewer than 5 years ago, so your principal most likely hasn't gone down much.

The Proof is in the Appraisal

At the point you find you've reached 20 percent equity in your home, you can start the process of getting PMI out of your budget. You will first notify your lender that you are requesting to cancel your PMI. Lenders ask for documentation verifying your eligibility at this point. A state certified appraisal documented on the appropriate form (URAR-1004 - Uniform Residential Appraisal Report) is the best proof there is � and your lender will probably request one before they agree to cancel PMI.

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

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