Congress has enacted legislation making private mortgage insurance (PMI) cancellation automatic (taking effect with new loans originated in the summer of 1999). For existing loans, lenders are required to start sending customers annual notices of their cancellation rights (mainly the right to petition for PMI cancellation when your equity reaches 20% due to principal reduction or home appreciation).

The new legislation requires lenders to cancel PMI automatically when your equity reaches 22% (based on principal reduction). With regularly scheduled payments on a mortgage amortized over 30 years, you will reach the 22% threshold in nearly 10 years with a 10% down payment. It will take you about 12 years to get there when you put 5% down.

The law allows the lender to require an appraisal to verify that your home's value has not declined. The lender may turn down your request if you have paid more than 30 days late during the 12 months (or 60 days late during the 24 months) leading up to your eligibility to drop PMI.

For a free consultation to discuss which type of mortgage loan will work best for you, call Victoria Spannaus at Wachovia Mortgage Corp. at

(800) 741-7813 or 910-692-6225.