Goodbye, PMI!

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While lenders have been legally required (for loans closed after July 1999) to cancel Private Mortgage Insurance (PMI) when the loan balance goes under 78% of the purchase price, they do not have to cancel automatically if the loan's equity is over 22%. (There are some loans that are not included -like a number of "high risk' loans.) But you have the right to cancel PMI yourself (for loans closed after July 1999) when your equity reaches 20 percent, regardless of the original purchase price.

Verify the numbers

Keep a running total of your principal payments. Pay attention to the prices of other houses in your immediate area. Unfortunately, if you have a new mortgage - five years or fewer, you probably haven't started to pay a lot of the principal: you have been paying mostly interest.

Verify Eligibility

Once your equity has reached the desired twenty percent, you are close to canceling your PMI payments, once and for all. Contact the lending institution to ask for cancellation of PMI. Lending institutions require proof of eligibility at this point. The best proof there is can be found in a state certified appraisal on form URAR-1004 (Uniform Residential Appraisal Report), required by most lending institutions before canceling PMI.

Fidelity Bancorp can help find out if you can eliminate your PMI. Give us a call: (888) 998-9868.

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Fidelity Bancorp

Company NMLS#: 326625 | DRE#: 01790174

2990 Inland Empire Blvd. Suite 112
Ontario, CA 91764