Eliminating Private Mortgage Insurance

For loans closed since July 1999, lending institutions are required (by federal law) to automatically cancel Private Mortgage Insurance (PMI) when the loan balance goes under 78 percent of your purchase price � but not when the borrower achieves 22 percent equity. (This legal requirment does not cover a number of higher risk mortgages.) The good news is that you can cancel your PMI yourself (for a mortgage closing past July '99), no matter the original price of purchase, at the point your equity reaches twenty percent.

Do your homework

Keep track of your principal payments. You'll want to be aware of the prices of the homes that are selling around you. You are paying mostly interest if the closing was fewer than 5 years ago, so your principal most likely hasn't gone down much.

Verify Equity Amount

You can begin the process of PMI cancelation at the time you calculate that your equity reaches 20%. You will need to notify your mortgage lender that you want to cancel PMI. Your lender will require documentation that your equity is high enough. You can acquire documentation of your home's equity by getting a state certified appraisal using form URAR-1004 (Uniform Residential Appraisal Report), required by most lending institutions before canceling PMI.

Riviera Funding NMLS#861382 CA DRE Broker #01186669 can help find out if you can eliminate your PMI. Give us a call at 3103737406.

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

Riviera Funding NMLS#861382 CA DRE Broker #01186669

1801 S. Catalina Avenue Suite #201
Redondo Beach, CA 90277