Goodbye, PMI!

While lenders have been legally obligated (for loans closed after July 1999) to cancel Private Mortgage Insurance (PMI) at the time the balance dips under 78% of the purchase price, they do not have to cancel automatically if the borrower's equity is over 22%. (The legal requirment does not cover some higher risk mortgages.) The good news is that you can request cancelation of your PMI yourself (for a mortgage closing after July '99), regardless of the original price of purchase, when the equity rises to twenty percent.

Do your homework

Review your statements often. You'll want to keep track of the the purchase amounts of the homes that sell in your neighborhood. If your mortgage is fewer than five years old, probably you haven't made much progress with the principal � it's been mostly interest.

Proof of Equity

Once you determine you have achieved at least 20 percent equity in your home, you can begin the process of canceling your Private Mortgage Insurance. Call the lender to ask for cancellation of PMI. Your lender will ask for proof that your equity is at 20 percent or above. Usually lenders require a state certified appraisal documented on the form: URAR-1004 (Uniform Residential Appraisal Report) to determine your equity and eligibility for canceling PMI.

Assured Mortgage can answer questions about PMI and many others. Call us at (414) 350-5834.

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