Goodbye, PMI!

For loans made since July 1999, lending institutions are obligated (by federal law) to automatically cancel Private Mortgage Insurance (PMI) when the balance of the loan goes lower than 78 percent of your purchase price � but not at the point the loan reaches 22 percent equity. (The legal obligation does not include certain higher risk mortgages.) The good news is that you can cancel your PMI yourself (for a mortgage loan that closed past July '99), without considering the original price of purchase, when the equity reaches twenty percent.

Do your homework

Study your statements often. Make yourself aware of the selling prices of other homes in your immediate area. If your loan is fewer than five years old, it's likely you haven't made much progress with the principal � you have paid mostly interest.

The Proof is in the Appraisal

You can start the process of canceling PMI at the time you're sure your equity has risen to 20%. Call your mortgage lender to request cancellation of PMI. Next, you will be asked to submit documentation that you have at least 20 percent equity. Most lenders ask for a state certified appraisal documented on the form: URAR-1004 (Uniform Residential Appraisal Report) to verify your equity and eligibility for PMI cancellation.

Coastal Mortgage Corp. can answer questions about PMI and many others. Call us at 504-866-5626.

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