Goodbye, PMI!

While lending institutions have been legally required (for loans closed after July 1999) to cancel Private Mortgage Insurance (PMI) when 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 more than 22%. (There are some loans that are not covered by this law -like some "high risk' loans.) But you can actually cancel PMI yourself (for loans closed past July 1999) once your equity rises to 20 percent, regardless of the original price of purchase.

Do your homework

Analyze your statements often. You'll want to be aware of the prices of the houses that are selling around you. You are paying mostly interest if your loan closed fewer than 5 years ago, so your principal probably hasn't been reduced by much.

The Proof is in the Appraisal

Once you find you have reached 20 percent equity, you can start the process of getting PMI out of your budget. You will need to notify your mortgage lender that you want to cancel PMI payments. Next, you will be required to submit proof that you have at least 20 percent equity. A state certified appraisal using the appropriate form (URAR-1004 - Uniform Residential Appraisal Report) is the best proof there is � and most lenders will require one before they agree to cancel.

At Executive Lending Group, we answer questions about PMI every day. Give us a call at 4056158543.

Got a Question?

Do you have a question? We can help. Simply fill out the form below and we'll contact you with the answer, with no obligation to you. We guarantee your privacy.

Your Information
Your Question

Executive Lending Group

A Division of 1st Capital Mortgage LLC

2401 Tee Circle, STE 102B
Norman, OK 73069