Eliminating Private Mortgage Insurance
While lending institutions have been required (for loans closed after July 1999) to cancel Private Mortgage Insurance (PMI) at the point the balance dips under 78% of the purchase price, they do not have to take similar action if the borrower's equity is above 22%. (The legal requirment does not cover some higher risk mortgages.) But you have the right to cancel PMI yourself (for mortgage loans made past July 1999) once your equity gets to 20 percent, regardless of the original purchase price.
Verify the numbers
Keep track of each principal payment. Find out the selling prices of other houses in your neighborhood. You are paying mostly interest if your mortgage loan closed fewer than 5 years ago, so your principal probably hasn't been reduced by much.
Verify Equity Amount
You can begin the process of PMI cancelation at the time you're sure your equity has reached 20%. Call your lender to request cancellation of your Private Mortgage Insurance. Then you will be asked to submit documentation that you are eligible to cancel. 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 help find out if you can eliminate your PMI. Give us a call at 4078987559.