08:30 – 5:00

Monday to Friday

5001 California Avenue, Suite 200

661-324-AGAPE

Your Bakersfield Mortgage Professional

December 13, 2017

08:30 – 5:00

Monday to Friday

5001 California Avenue, Suite 200

661-324-AGAPE

Eliminating PMI

Eliminating Private Mortgage Insurance

 

Beginning in 1999, lending institutions have been obligated to cancel a borrower’s Private Mortgage Insurance (PMI) at the point his mortgage balance (for loans closed after July of that year) goes under seventy-eight percent of the purchase price, but not when the loan’s equity reaches twenty-two percent or more. (The law does not apply to certain higher risk mortgages.) The good news is that you can cancel your PMI yourself (for your mortgage loan closing past July ’99), no matter the original price of purchase, once the equity climbs to twenty percent.

Do your homework

Familiarize yourself with your monthly statements to keep a running total of principal payments. Also stay aware of what other homes are being sold for in your neighborhood. You are paying mostly interest if your loan closed fewer than 5 years ago, so your principal probably hasn’t been reduced by much.

The Proof is in the Appraisal

You can start the process of PMI cancelation at the time you you think that your equity reaches 20%. Contact the mortgage lender to ask for cancellation of your PMI. The lending institution will request proof that your equity is at 20 percent or above. Most lenders ask for a state certified appraisal documented on the form: URAR-1004 (Uniform Residential Appraisal Report) to verify your home’s equity and eligibility for PMI cancellation.

Agape Mortgage can answer questions about PMI and many others. Give us a call at 661.324.2427.

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