Make Private Mortgage Insurance a Thing of the Past
Since 1999, lending institutions have been obligated to cancel a borrower's Private Mortgage Insurance (PMI) at the point his mortgage balance (for loans made past July of '99) goes beneath seventy-eight percent of the price of purchase, but not at the point the loan's equity climbs to twenty-two percent or more. (The law does not cover a number of higher risk mortgages.) However, you have the right to cancel PMI yourself (for mortgage loans made past July 1999) when your equity reaches 20 percent, no matter the original purchase price.
Verify the numbers
Review your statements often. Also be aware of the price that other homes are purchased for in your neighborhood. If your mortgage is fewer than five years old, it's likely you haven't paid down much principal � it's been mostly interest.
Proof of Equity
Once you determine you've reached 20 percent equity, you can begin the process of freeing yourself from PMI payments. You will need to notify your mortgage lender that you wish to cancel PMI. Lending institutions request proof of eligibility at this point. A state certified appraisal using the appropriate form (URAR-1004 - Uniform Residential Appraisal Report) is all the proof you need � and your lender will probably request one before they'll cancel PMI.
Tier One Mortgage, LLC can answer questions about PMI and many others. Give us a call: (585) 282-0960.