Canceling Private Mortgage Insurance
For loans closed after July 1999, lenders are required (by federal law) to automatically cancel Private Mortgage Insurance (PMI) when the balance of the loan falls below 78 percent of your purchase price � but not at the point the borrower earns 22 percent equity. (The legal obligation does not apply to certain higher risk mortgages.) The good news is that you can cancel your PMI yourself (for a mortgage that closed after July '99), regardless of the original price of purchase, when the equity gets to twenty percent.
Verify the numbers
Analyze your statements often. Pay attention to the selling prices of other houses in your neighborhood. If your mortgage is under five years old, chances are you haven't greatly reduced principal � you have been paying mostly interest.
Verify Equity Amount
You can start the process of PMI cancelation when you calculate that your equity has risen to 20%. You will need to contact your lender to let them know that you wish to cancel PMI. Lending institutions require proof of 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.