Canceling Private Mortgage Insurance
Beginning in 1999, lenders have been obligated to cancel a borrower's Private Mortgage Insurance (PMI) at the point his loan balance (for a loan closed past July of '99) goes under seventy-eight percent of the price of purchase, but not when the loan's equity climbs to twenty-two percent or more. (There are some exceptions -like some "high risk' loans.) However, you are able to cancel PMI yourself (for mortgages closed after July 1999) at the point your equity reaches 20 percent, regardless of the original purchase price.
Keep a running total of payments
Keep track of your principal payments. Also be aware of the price that other homes are purchased for in your neighborhood. Unfortunately, if you have a recent loan - five years or fewer, you probably haven't started to pay a lot of the principal: you are paying mostly interest.
The Proof is in the Appraisal
You can start the process of PMI cancelation when you calculate that your equity has reached 20%. Call your mortgage lender to request cancellation of PMI. Lending institutions require proof of eligibility at this point. You can get proof of your equity by getting a state certified appraisal using form URAR-1004 (Uniform Residential Appraisal Report), which is required by most lenders before canceling PMI.
America's Money Source can help find out if you can eliminate your PMI. Give us a call: (407) 898-7559.
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