Goodbye, PMI!

Beginning in 1999, lenders have been obligated to cancel a borrower's Private Mortgage Insurance (PMI) at the point his loan balance (for loans made after July of '99) reaches less than seventy-eight percent of the purchase price, but not when the loan's equity gets to over twenty-two percent. (A number of "higher risk" morgages are excluded.) However, you are able to cancel PMI yourself (for mortgage loans made after July 1999) when your equity gets to 20 percent, without consideration of the original price of purchase.

Do your homework

Keep track of each principal payment. You'll want to stay aware of the the purchase prices of the homes that are selling around you. Unfortunately, if yours is a recent mortgage - five years or under, you probably haven't had a chance to pay a lot of the principal: you have been paying mostly interest.

Proof of Equity

As soon as your equity has reached the desired twenty percent, you are close to canceling your PMI payments, for the life of your loan. First you will let your lender know that you are requesting to cancel PMI. Lenders ask for proof of eligibility at this point. You can acquire documentation of your home's equity by getting a state certified appraisal on form URAR-1004 (Uniform Residential Appraisal Report), which is required by most lending institutions before canceling PMI.

At Foxfield Financial, we answer questions about PMI every day. Call us: 720-598-8300.

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