Agent

Be proactive when canceling PMI

3 things to do once your loan-to-value ratio hits 78 percent

DEAR BENNY: We purchased our home a year ago for $153,000 and put $16,000 cash down. PMI was required. I want to end the PMI as soon as possible and understand that the home equity must reach a certain point (the agent said after two years we could try to get it canceled). Isn't there a law that if we are current with our payments we can opt out of PMI? We purchased a short-sale home and the value has been appraised higher now. Will that work against us? --Phyllis DEAR PHYLLIS: I wish it were that simple. No, there is no law that says you can cancel PMI if you are current with your mortgage payments. There was a law enacted several years ago that will give you some, but not a lot of, comfort. For my readers: PMI stands for private mortgage insurance. Generally, if you obtain a loan of more than 80 percent of the purchase price, lenders will require that you obtain -- and pay for -- this insurance. Basically, it protects the lender in the event it has to foreclose on your p...