Make Private Mortgage Insurance a Thing of the Past
For loans closed after July 1999, lenders are required (by federal law) to automatically cancel Private Mortgage Insurance (PMI) when the loan balance goes under 78 percent of the purchase amount � but not when the borrower earns 22 percent equity. (Certain "higher risk" loans are not included.) But you are able to cancel PMI yourself (for mortgage loans closed after July 1999) at the point your equity gets to 20 percent, without consideration of the original purchase price.
Keep a record of payments
Study your statements often. You'll want to keep track of the prices of the homes that sell in your neighborhood. If your loan is under five years old, it's likely you haven't greatly reduced principal � it's been mostly interest.
The Proof is in the Appraisal
Once you think you've achieved at least 20 percent equity, you can start the process of getting PMI out of your budget. First you will let your lending institution know that you are asking to cancel PMI. Lenders ask for documentation verifying your eligibility at this point. Usually lenders require a state certified appraisal documented on the form: URAR-1004 (Uniform Residential Appraisal Report) to verify your home's equity and eligibility for canceling PMI.
America's Money Source can answer questions about PMI and many others. Call us: 4078987559.