Eliminating PMI

We understand the frustration of paying Private Mortgage Insurance (PMI) on your mortgage. This additional monthly expense can significantly impact your budget. The good news is, there are ways to eliminate PMI and free up those extra funds.

Understanding PMI Cancellation:

Since 1999, federal regulations require lenders to automatically cancel PMI when your loan balance reaches 78% of the original purchase price (for loans originated after July 1999). However, this doesn't necessarily mean you have to wait that long. Here's a powerful alternative:

• Reaching 20% Equity: You can request PMI cancellation once your home's equity reaches at least 20% of the original purchase price (regardless of the current loan balance). This 20% equity benchmark applies to loans originated after July 1999.

Taking Action: The Path to PMI Elimination

If you suspect you have reached the 20% equity threshold, here's what to do:

• Track Your Progress: Regularly review your mortgage statements to monitor your loan balance. Additionally, research recent home sale prices in your neighborhood to estimate your home's current market value. This will give you a good understanding of your equity position.
• Confirm Eligibility: Once you're confident you have at least 20% equity, contact your mortgage lender and formally request PMI cancellation. They will likely require documentation to verify your eligibility.
• Appraisal Power: In most cases, a new appraisal from a state-certified appraiser is the primary document needed to prove your equity. Your lender will typically arrange this appraisal on your behalf.

At Y&L Mortgage, we're committed to helping you achieve your financial goals. Our experienced loan officers can guide you through the PMI cancellation process and answer any questions you may have. Contact us today to discuss your options and free yourself from the burden of PMI!