Make Private Mortgage Insurance a Thing of the Past

For loans closed since July 1999, lenders are obligated (by federal law) to automatically cancel Private Mortgage Insurance (PMI) when the balance of the loan gets under 78 percent of the purchase price � but not at the point the borrower earns 22 percent equity. (There are exceptions -like some loans considered 'high risk'.) The good news is that you can request cancelation of your PMI yourself (for a mortgage that closed past July '99), no matter the original price of purchase, after your equity gets to twenty percent.

Do your homework

Study your loan statements often. Also be aware of how much other homes are purchased for in your neighborhood. Unfortunately, if you have a new loan - five years or under, you probably haven't begun to pay very much of the principal: you are paying mostly interest.

Verify Eligibility

As soon as your equity has risen to the required twenty percent, you are close to stopping your PMI payments, for the life of your loan. You will first let your lender know that you are requesting to cancel PMI. Your lender will request documentation that your equity is at 20 percent or above. A state certified appraisal documented on the appropriate form (URAR-1004 - Uniform Residential Appraisal Report) is the best proof there is � and almost all lenders will require one before they'll cancel PMI.

SkyWest Mortgage can help find out if you can eliminate your PMI. Call us at (916) 399-5500.

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