Goodbye, PMI!

Since 1999, lenders have been legally required to cancel a borrower's Private Mortgage Insurance (PMI) at the point his loan balance (for a loan made after July of that year) reaches less than seventy-eight percent of the price of purchase, but not at the time the loan's equity reaches twenty-two percent or more. (A number of "higher risk" loan programs are not included.) However, if your equity reaches 20% (regardless of the original price of purchase), you are able to cancel your PMI (for a loan closed after July 1999).

Verify the numbers

Keep track of money going toward the principal. You'll want to keep track of the the purchase prices of the houses that are selling around you. Unfortunately, if yours is a recent mortgage - five years or fewer, you likely haven't been able to pay very much of the principal: you are paying mostly interest.

The Proof is in the Appraisal

As soon as your equity has reached the magic number of twenty percent, you are just a few steps away from canceling your PMI payments, once and for all. Call the lender to ask for cancellation of PMI. Lenders ask for 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 lenders 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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