Make Private Mortgage Insurance a Thing of the Past

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For loans closed since July 1999, lenders are required (by federal law) to automatically cancel Private Mortgage Insurance (PMI) when the loan balance falls below 78 percent of the purchase amount - but not at the point the loan reaches 22 percent equity. (Certain "higher risk" loan programs are excluded.) However, you are able to cancel PMI yourself (for mortgages made past July 1999) at the point your equity gets to 20 percent, regardless of the original price of purchase.

Do your homework

Analyze your statements often. You'll want to stay aware of the prices of the houses that are selling in your neighborhood. If your loan is fewer than five years old, probably you haven't paid down much principal - you have paid mostly interest.

Proof of Equity

You can start the process of PMI cancellation as soon as you you think that your equity has risen to 20%. Contact your lending institution to request cancellation of your Private Mortgage Insurance. Then you will be asked to verify that you are eligible to cancel. A state certified appraisal documented on the appropriate form (URAR-1004 - Uniform Residential Appraisal Report) is the best proof there is - and your lender will probably require one before they'll cancel PMI.

VENTURE DEVELOPMENT INC can help find out if you can eliminate your PMI. Give us a call: 952-929-2577.