Goodbye, PMI!

While lenders have been required (for loans closed past July 1999) to cancel Private Mortgage Insurance (PMI) at the point the loan balance gets below 78% of the purchase price, they do not have to cancel automatically if the equity is more than 22%. (The legal obligation does not include a number of higher risk mortgages.) But you are able to cancel PMI yourself (for mortgages closed after July 1999) when your equity reaches 20 percent, without consideration of the original price of purchase.

Verify the numbers

Familiarize yourself with your mortgage statements to keep track of principal payments. You'll want to keep track of the prices of the houses that are selling around you. You've been paying mostly interest if you closed your mortgage fewer than 5 years ago, so your principal probably hasn't lowered much.

Verify Equity Amount

You can start the process of canceling PMI when you determine your equity has reached 20%. You will first tell your lender that you are asking to cancel PMI. Lending institutions request documentation verifying your eligibility at this point. A state certified appraisal using the appropriate form (URAR-1004 - Uniform Residential Appraisal Report) will be all the proof you need � and almost all lenders request one before they agree to cancel PMI.

F&T Mortgage, Inc. NMLS # 168839 ( can answer questions about PMI and many others. Call us: 214-300-8756.

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