Goodbye, PMI!

Beginning in 1999, lending institutions have been legally 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 borrower's equity reaches more than twenty-two percent. (There are exceptions -like some "high risk' loans.) However, you have the right to cancel PMI yourself (for mortgages made past July 1999) once your equity gets to 20 percent, no matter the original purchase price.

Do your homework

Study your statements often. Also be aware of what other homes are being sold for in your neighborhood. Unfortunately, if yours is a recent mortgage loan - five years or fewer, you likely haven't started to pay very much of the principal: you have been paying mostly interest.

The Proof is in the Appraisal

At the point you determine you have achieved at least 20 percent equity, you can start the process of freeing yourself from PMI payments. Call the mortgage lender to request cancellation of PMI. Then you will be required to verify that you have at least 20 percent equity. A state certified appraisal using the appropriate form (URAR-1004 - Uniform Residential Appraisal Report) is all the proof you need � and your lender will probably require one before they agree to cancel.

Channel Mortgage LLC can answer questions about PMI and many others. Give us a call at 7186399500.

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Channel Mortgage LLC

Connecting the Dots to Home Ownership

55-25 69th Street 1st Floor
Maspeth, NY 11378-1806