Goodbye, PMI!

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Although lending institutions have been obligated (for loans closed past July 1999) to cancel Private Mortgage Insurance (PMI) when the mortgage balance gets under 78% of the price of purchase, they do not have to cancel PMI automatically if the loan's equity is over 22%. (There are some exceptions -like some "high risk' loans.) However, you have the right to cancel PMI yourself (for loans closed after July 1999) at the point your equity gets to 20 percent, no matter the original price of purchase.

Do your homework

Familiarize yourself with your monthly statements to keep a running total of principal payments. You'll want to keep track of the the purchase amounts of the homes that sell around you. You've been paying mostly interest if your loan closed fewer than 5 years ago, so your principal most likely hasn't been reduced by much.

The Proof is in the Appraisal

You can start the process of PMI cancellation at the time you you think that your equity reaches 20%. You will need to contact the lender to let them know that you want to cancel PMI. Next, you will be required to submit documentation that you are eligible to cancel. You can acquire documentation of your equity by getting a state certified appraisal using form URAR-1004 (Uniform Residential Appraisal Report), required by most lending institutions before canceling PMI.

Creative Financial can answer questions about PMI and many others. Call us at (808) 891-9292.
quity even if you haven't paid down much principal.


When you think you've reached 20 percent equity in your home, you can begin the process of freeing yourself from PMI payments!  You will need to notify your mortgage lender that you want to cancel PMI payments and you'll need to submit proof that you have at least 20 percent equity.  A state certified appraisal on the appropriate form (URAR- 1004 uniform residential appraisal report for single family homes) is the best proof there is — and most lenders require one before they'll cancel PMI.

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