Beginning in 1999, lenders have been legally required to cancel a borrower's Private Mortgage Insurance (PMI) when his mortgage balance (for a loan closed past July of that year) goes beneath seventy-eight percent of the purchase price, but not when the loan's equity gets to more than twenty-two percent. (The law does not include certain higher risk mortgages.) However, if your equity reaches 20% (no matter what the original purchase price was), you have the right to cancel PMI (for a loan closed past July 1999).
Do your homework
Keep track of your principal payments. Make yourself aware of the purchase prices of other houses in your immediate area. If your loan is under five years old, chances are you haven't made much progress with the principal � you have paid mostly interest.
Proof of Equity
As soon as your equity has risen to the desired twenty percent, you are close to getting rid of your PMI payments, once and for all. Contact your mortgage lender to ask for cancellation of your PMI. Lenders require documentation verifying your eligibility at this point. Most lenders ask for a state certified appraisal documented on the form: URAR-1004 (Uniform Residential Appraisal Report) to determine your home's equity and eligibility for PMI cancellation.
America's Money Source can help find out if you can eliminate your PMI. Call us at 4078987559.