Goodbye, PMI!

Since 1999, lending institutions have been required to cancel a borrower's Private Mortgage Insurance (PMI) at the point his mortgage balance (for loans closed past July of '99) goes below seventy-eight percent of the purchase price, but not at the time the borrower's equity climbs to twenty-two percent or more. (There are some exceptions -like some loans considered 'high risk'.) However, you have the right to cancel PMI yourself (for loans made past July 1999) once your equity rises to 20 percent, without consideration of the original price of purchase.

Verify the numbers

Keep a running total of money going toward the principal. You'll want to stay aware of the the purchase prices of the houses that sell around you. If your mortgage is fewer than five years old, chances are you haven't made much progress with the principal � you have been paying mostly interest.

Proof of Equity

At the point your equity has reached the desired twenty percent, you are close to getting rid of your PMI payments, once and for all. You will first tell your lender that you are asking to cancel your PMI. The lending institution will ask for proof that your equity is at 20 percent or above. Most lenders ask for a state certified appraisal documented on the form: URAR-1004 (Uniform Residential Appraisal Report) to verify your home's equity and eligibility for canceling PMI.

Abbey Mortgage can answer questions about PMI and many others. Give us a call: 352-369-4200.

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