Goodbye, PMI!

While lending institutions have been legally required (for loans closed after July 1999) to cancel Private Mortgage Insurance (PMI) at the point the mortgage balance goes below 78% of the purchase price, they do not have to take similar action if the loan's equity is more than 22%. (A number of "higher risk" loan programs are excluded.) 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 purchase price, when your equity reaches twenty percent.

Keep track of payments

Analyze your monthly statements often. You'll want to be aware of the prices of the homes that are selling around you. Unfortunately, if you have a new mortgage - five years or fewer, you likely haven't been able to pay a lot of the principal: you have been paying mostly interest.

Verify Eligibility

At the point you think you have achieved at least 20 percent equity, you can begin the process of canceling your Private Mortgage Insurance. You will need to notify your mortgage lender that you want to cancel PMI payments. The lending institution will ask for proof that your equity is high enough. A state certified appraisal documented on the appropriate form (URAR-1004 - Uniform Residential Appraisal Report) verifies your equity amount � and your lender will probably require one before they agree to cancel PMI.

Stepping Stone Mortgage can answer questions about PMI and many others. Call us at 5416833300.