Make Private Mortgage Insurance a Thing of the Past

For loans made since July 1999, lending institutions are required (by federal law) to automatically cancel Private Mortgage Insurance (PMI) when the balance of the loan falls below 78 percent of the purchase price � but not at the point the borrower achieves 22 percent equity. (Certain "higher risk" loans are excluded.) But you are able to cancel PMI yourself (for mortgage loans made after July 1999) at the point your equity rises to 20 percent, without consideration of the original purchase price.

Verify the numbers

Familiarize yourself with your monthly statements to keep a running total of principal payments. You'll want to stay aware of the the purchase amounts of the houses that sell around you. You've been paying mostly interest if your closing was fewer than 5 years ago, so your principal most likely hasn't lowered much.

The Proof is in the Appraisal

At the point your equity has reached the desired twenty percent, you are close to canceling your PMI payments, for the life of your loan. First you will let your lender know that you are asking to cancel PMI. Lending institutions request proof of eligibility at this point. Usually lenders ask for a state certified appraisal documented on the form: URAR-1004 (Uniform Residential Appraisal Report) to verify your equity and eligibility for PMI cancellation.

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



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