Goodbye, PMI!

While lenders have been legally obligated (for loans closed past July 1999) to cancel Private Mortgage Insurance (PMI) when the mortgage balance dips below 78% of the purchase price, they do not have to cancel PMI automatically if the loan's equity is above 22%. (Some "higher risk" loans are excluded.) The good news is that you can request cancelation of your PMI yourself (for your mortgage loan that closed past July '99), no matter the original price of purchase, at the point your equity gets to twenty percent.

Do your homework

Familiarize yourself with your monthly statements to keep track of principal payments. You'll want to keep track of the the purchase prices of the houses that sell around you. If your mortgage is fewer than five years old, probably you haven't paid down much principal � you have been paying mostly interest.

Proof of Equity

You can start the process of PMI cancelation at the time you're sure your equity reaches 20%. Call your lender to ask for cancellation of PMI. The lending institution will request documentation 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 verify your home's equity and eligibility for PMI cancellation.

Financial Edge Mortgage Corp. can answer questions about PMI and many others. Give us a call: 425-508-9988.