Goodbye, PMI!

Although lenders have been legally obligated (for loans closed after July 1999) to cancel Private Mortgage Insurance (PMI) when the loan balance gets under 78% of the price of purchase, they do not have to take similar action if the loan's equity is more than 22%. (A number of "higher risk" morgages are not included.) But if your equity rises to 20% (regardless of the original purchase price), you are able to cancel PMI (for a loan that past July 1999).

Verify the numbers

Familiarize yourself with your mortgage statements to keep a running total of principal payments. You'll want to be aware of the the purchase amounts of the houses that are selling in your neighborhood. If your mortgage is fewer than five years old, probably you haven't paid down much principal � you have paid mostly interest.

The Proof is in the Appraisal

Once your equity has reached the desired twenty percent, you are just a few steps away from canceling your PMI payments, for the life of your loan. Call your lender to ask for cancellation of your Private Mortgage Insurance. Lending institutions request paperwork verifying your eligibility at this point. You can get documentation of your home's equity by getting a state certified appraisal on form URAR-1004 (Uniform Residential Appraisal Report), which is required by most lending institutions before canceling PMI.

Hawk Mortgage Group can answer questions about PMI and many others. Call us: (443) 619-7900.

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