Make Private Mortgage Insurance a Thing of the Past

Although lenders have been obligated (for loans closed after July '99) to cancel Private Mortgage Insurance (PMI) at the point the mortgage balance dips below 78% of the purchase price, they do not have to take similar action if the borrower's equity is over 22%. (There are some loans that are not included -like some "high risk' loans.) But you are able to cancel PMI yourself (for mortgages made after July 1999) when your equity rises to 20 percent, no matter the original price of purchase.

Do your homework

Familiarize yourself with your loan statements to keep your eye on principal payments. Also stay aware of how much other homes are selling for in your neighborhood. You've been paying mostly interest if your closing was fewer than 5 years ago, so your principal probably hasn't lowered much.

Proof of Equity

You can begin the process of PMI cancelation as soon as you calculate that your equity reaches 20%. You will first notify your lender that you are requesting to cancel PMI. Your lender will ask for documentation that your equity is high enough. A state certified appraisal documented on the appropriate form (URAR-1004 - Uniform Residential Appraisal Report) will be all the proof you need ? and most lenders request one before they'll cancel PMI.

We can set you up with so many programs that eliminate PMI altogether so give us a call today to see how!

At Lighthouse Mortgage Company, we answer questions about PMI every day. Give us a call at 916-434-8915.

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