Canceling Private Mortgage Insurance

Since 1999, lending institutions have been legally required to cancel a borrower's Private Mortgage Insurance (PMI) when his mortgage balance (for a loan made after July of '99) reaches less than seventy-eight percent of the price of purchase, but not at the time the borrower's equity gets to more than twenty-two percent. (There are some exceptions -like a number of "high risk' loans.) The good news is that you can request cancelation of your PMI yourself (for a mortgage loan closing past July '99), regardless of the original price of purchase, at the point your equity climbs to twenty percent.

Keep a running total of payments

Keep track of each principal payment. You'll want to stay aware of the prices of the houses that sell in your neighborhood. Unfortunately, if you have a recent mortgage - five years or under, you likely haven't had a chance to pay much of the principal: you have been paying mostly interest.

Verify Equity Amount

You can start the process of canceling your PMI as soon as you're sure your equity has reached 20%. First you will notify your lender that you are asking to cancel PMI. Lenders request proof of eligibility at this point. 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.

Stepping Stone Mortgage can help find out if you can eliminate your PMI. Give us a call: (541) 683-3300.

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