Eliminating Private Mortgage Insurance

Although lending institutions have been legally required (for loans closed past July 1999) to cancel Private Mortgage Insurance (PMI) when the balance dips below 78% of the price of purchase, they do not have to cancel automatically if the equity is more than 22%. (There are exceptions -like certain "high risk' loans.) But if your equity rises to 20% (regardless of the original price of purchase), you are able to cancel the PMI (for a loan that past July 1999).

Keep a running total of payments

Keep a running total of each principal payment. Make yourself aware of the prices of other houses in your immediate area. If your mortgage is fewer than five years old, chances are you haven't made much progress with the principal � it's been mostly interest.

Verify Eligibility

As soon as your equity has reached the magic number of twenty percent, you are just a few steps away from canceling your PMI payments, once and for all. Contact the lender to ask for cancellation of PMI. Lenders require proof of eligibility at this point. Usually 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 canceling PMI.

At Hawk Mortgage Group, we answer questions about PMI every day. Give us a call: (443) 619-7900.

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