Eliminating Private Mortgage Insurance

Since 1999, lending institutions have been legally obligated to cancel a borrower's Private Mortgage Insurance (PMI) at the point his loan balance (for a loan closed after July of '99) goes below seventy-eight percent of the purchase price, but not when the loan's equity reaches more than twenty-two percent. (There are some loans that are not included -like certain "high risk' loans.) However, if your equity rises to 20% (no matter what the original purchase price was), you can cancel your PMI (for a mortgage closed after July 1999).

Keep a running total of payments

Analyze your statements often. Pay attention to the purchase 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 � you have been paying mostly interest.

Verify Eligibility

Once your equity has risen to the magic number of twenty percent, you are close to getting rid of your PMI payments, for the life of your loan. You will first let your lender know that you are asking to cancel your PMI. Next, you will be required to submit documentation that you have at least 20 percent equity. The best proof there is can be found in a state certified appraisal using form URAR-1004 (Uniform Residential Appraisal Report), required by most lenders before canceling PMI.

Family Mortgage Company of Hawaii, Inc. NMLS #244497 can help find out if you can eliminate your PMI. Call us: (808) 935-0678.