Make Private Mortgage Insurance a Thing of the Past

While lending institutions have been legally required (for loans closed after July 1999) to cancel Private Mortgage Insurance (PMI) when the balance goes below 78% of the purchase price, they do not have to cancel PMI automatically if the borrower's equity is above 22%. (Certain "higher risk" mortgage loans are not included.) The good news is that you can cancel your PMI yourself (for a mortgage loan closing after July '99), no matter the original price of purchase, once your equity climbs to twenty percent.

Keep a running total of payments

Analyze your monthly statements often. Pay attention to the prices of other houses in your immediate area. Unfortunately, if you have a new loan - five years or fewer, you likely haven't begun to pay a lot of the principal: you are paying mostly interest.

Proof of Equity

When you find you have reached 20 percent equity in your home, you can begin the process of canceling your Private Mortgage Insurance. You will first let your lending institution know that you are requesting to cancel your PMI. Lenders request proof of eligibility at this point. Most lenders ask for a state certified appraisal documented on the form: URAR-1004 (Uniform Residential Appraisal Report) to verify your equity and eligibility for canceling PMI.

At Stepping Stone Mortgage, we answer questions about PMI every day. Give us a call at (541) 683-3300.

Got a Question?

Do you have a question? We can help. Simply fill out the form below and we'll contact you with the answer, with no obligation to you. We guarantee your privacy.

Your Information
Your Question