Make Private Mortgage Insurance a Thing of the Past

Although lenders have been legally required (for loans closed past July '99) to cancel Private Mortgage Insurance (PMI) when the balance goes below 78% of the purchase price, they do not have to take similar action if the equity is more than 22%. (There are some exceptions -like a number of "high risk' loans.) But you can actually cancel PMI yourself (for mortgage loans closed past July 1999) once your equity rises to 20 percent, regardless of the original price of purchase.

Verify the numbers

Review your statements often. Also be aware of what other homes are selling for in your neighborhood. If your loan is fewer than five years old, chances are you haven't made much progress with the principal � it's been mostly interest.

The Proof is in the Appraisal

Once you find you have achieved at least 20 percent equity, you can start the process of freeing yourself from PMI payments. Call your mortgage lender to ask for cancellation of PMI. The lending institution will request proof that your equity is high enough. A state certified appraisal using the appropriate form (URAR-1004 - Uniform Residential Appraisal Report) will document your equity amount � and almost all lenders request one before they agree to cancel.

Custom Lending Group can help find out if you can eliminate your PMI. Call us: (707) 252-2700.

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