Canceling Private Mortgage Insurance

While lenders have been obligated (for loans closed after July '99) to cancel Private Mortgage Insurance (PMI) at the point the balance gets below 78% of the price of purchase, they do not have to take similar action if the equity is above 22%. (There are exceptions -like some "high risk' loans.) However, you have the right to cancel PMI yourself (for loans closed after July 1999) once your equity rises to 20 percent, no matter the original price of purchase.

Do your homework

Analyze your statements often. Also keep track of what other homes are being sold for in your neighborhood. Unfortunately, if yours is a recent mortgage loan - five years or under, you likely haven't been able to pay much of the principal: you are paying mostly interest.

The Proof is in the Appraisal

At the point your equity has risen to the magic number of twenty percent, you are close to canceling your PMI payments, for the life of your loan. Call the lender to request cancellation of your PMI. Lenders request proof of eligibility at this point. A state certified appraisal documented on the appropriate form (URAR-1004 - Uniform Residential Appraisal Report) is all the proof you need � and your lender will probably request one before they agree to cancel PMI.

Lighthouse Mortgage Company can answer questions about PMI and many others. Call us at 9164348915.

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
By checking the box, you agree that Lighthouse Mortgage Company may call/text you about your inquiry, which may involve use of automated means and prerecorded/artificial voices.. Message/data rates may apply.