Canceling Private Mortgage Insurance

Although lending institutions have been legally required (for loans closed past July 1999) to cancel Private Mortgage Insurance (PMI) at the point the balance dips below 78% of the purchase price, they do not have to cancel automatically if the equity is over 22%. (Certain "higher risk" loans are excluded.) The good news is that you can cancel your PMI yourself (for a mortgage closing after July '99), without considering the original purchase price, once your equity climbs to twenty percent.

Do your homework

Keep a running total of each principal payment. Also stay aware of how much other homes are purchased for in your neighborhood. You've been paying mostly interest if your mortgage loan closed fewer than 5 years ago, so your principal most likely hasn't lowered much.

Verify Equity Amount

At the point your equity has reached the required twenty percent, you are close to canceling your PMI payments, once and for all. You will first let your lending institution know that you are requesting to cancel your PMI. Lending institutions require proof of eligibility at this point. A state certified appraisal using the appropriate form (URAR-1004 - Uniform Residential Appraisal Report) is all the proof you need � and almost all lending institutions require one before they agree to cancel.

First Community Bank of Central Al. can help find out if you can eliminate your PMI. Give us a call: (334) 285-8850.

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