Make Private Mortgage Insurance a Thing of the Past
While lending institutions have been legally required (for loans closed past July 1999) to cancel Private Mortgage Insurance (PMI) at the point the mortgage balance gets under 78% of the purchase price, they do not have to cancel PMI automatically if the borrower's equity is more than 22%. (The legal obligation does not include certain higher risk mortgages.) But if your equity gets to 20% (regardless of the original purchase price), you have the right to cancel PMI (for a mortgage that after July 1999).
Do your homework
Keep track of your principal payments. You'll want to keep track of the the purchase prices of the houses that are selling around you. You've been paying mostly interest if you closed your mortgage fewer than 5 years ago, so your principal most likely hasn't been reduced by much.
Proof of Equity
Once you think you've reached 20 percent equity, you can start the process of canceling your Private Mortgage Insurance. Call your mortgage lender to ask for cancellation of PMI. The lending institution will request proof that your equity is high enough. The best proof there is can be found in a state certified appraisal using form URAR-1004 (Uniform Residential Appraisal Report), which is required by most lending institutions before canceling PMI.
Debbie Oliver NMLS License #248252, America's First Choice Mortgage, NMLS License #279234 can answer questions about PMI and many others. Call us at 2146635355.