Canceling Private Mortgage Insurance

While lenders have been required (for loans closed after July 1999) to cancel Private Mortgage Insurance (PMI) when the loan balance dips below 78% of the price of purchase, they do not have to cancel automatically if the loan's equity is above 22%. (Some "higher risk" loan programs are not included.) The good news is that you can cancel your PMI yourself (for your loan closing after July '99), regardless of the original purchase price, once the equity climbs to twenty percent.

Keep track of payments

Familiarize yourself with your mortgage statements to keep track of principal payments. Find out the selling prices of other houses in your neighborhood. You've been paying mostly interest if the closing was fewer than 5 years ago, so your principal probably hasn't gone down much.

The Proof is in the Appraisal

You can begin the process of canceling PMI at the time you're sure your equity has reached 20%. You will need to notify your mortgage lender that you wish to cancel PMI payments. Next, you will be required to verify that you are eligible to cancel. The best proof there is can be found in a state certified appraisal on form URAR-1004 (Uniform Residential Appraisal Report), which is required by most lending institutions before canceling PMI.

Front Range Lending can help find out if you can eliminate your PMI. Give us a call: 7202537070.