Eliminating Private Mortgage Insurance
For loans closed since July 1999, lenders are obligated (by federal law) to automatically cancel Private Mortgage Insurance (PMI) when the balance of the loan goes lower than 78 percent of your purchase price � but not when the borrower earns 22 percent equity. (This legal requirment does not cover a number of higher risk mortgages.) However, if your equity reaches 20% (regardless of the original purchase price), you have the right to cancel your PMI (for a loan that past July 1999).
Keep a record of payments
Keep a running total of your principal payments. Make yourself aware of the purchase prices of other homes in your immediate area. You are paying mostly interest if your mortgage loan closed fewer than 5 years ago, so your principal most likely hasn't gone down much.
Verify Equity Amount
At the point your equity has reached the required twenty percent, you are not far away from stopping your PMI payments, once and for all. Contact the lending institution to request cancellation of your Private Mortgage Insurance. 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 canceling PMI.
Tier One Mortgage, LLC can help find out if you can eliminate your PMI. Give us a call at 5852820960.