Make Private Mortgage Insurance a Thing of the Past
Beginning in 1999, lenders have been legally obligated to cancel a borrower's Private Mortgage Insurance (PMI) when his mortgage balance (for a loan made past July of that year) reaches less than seventy-eight percent of the purchase price, but not when the borrower's equity reaches over twenty-two percent. (This law does not cover a number of higher risk mortgages.) But if your equity rises to 20% (no matter what the original price was), you have the right to cancel the PMI (for a loan that past July 1999).
Verify the numbers
Familiarize yourself with your loan statements to keep your eye on principal payments. You'll want to stay aware of the the purchase amounts of the homes that sell around you. If your mortgage is fewer than five years old, chances are you haven't paid down much principal � you have been paying mostly interest.
Proof of Equity
Once your equity has risen to the desired twenty percent, you are just a few steps away from stopping your PMI payments, for the life of your loan. You will need to notify your mortgage lender that you want to cancel PMI. Then you will be asked to submit proof that you are eligible to cancel. Most lenders require a state certified appraisal documented on the form: URAR-1004 (Uniform Residential Appraisal Report) to determine your home's equity and eligibility for canceling PMI.
Tier One Mortgage, LLC can help find out if you can eliminate your PMI. Give us a call at (585) 282-0960.