For loans closed since July 1999, lending institutions are obligated (by federal law) to automatically cancel Private Mortgage Insurance (PMI) when the balance of the loan goes under 78 percent of the purchase price � but not at the point the borrower achieves 22 percent equity. (Some "higher risk" loan programs are not included.) But you have the right to cancel PMI yourself (for mortgages made after July 1999) when your equity gets to 20 percent, no matter the original purchase price.
Keep a record of payments
Analyze your mortgage statements often. Make yourself aware of the purchase prices of other houses in your immediate area. Unfortunately, if yours is a recent mortgage - five years or under, you probably haven't begun to pay a lot of the principal: you are paying mostly interest.
Proof of Equity
You can begin the process of PMI cancelation as soon as you're sure your equity has risen to 20%. First you will notify your lender that you are requesting to cancel your PMI. Lenders request paperwork verifying your eligibility at this point. A state certified appraisal using the appropriate form (URAR-1004 - Uniform Residential Appraisal Report) will be all the proof you need � and your lender will probably require one before they'll cancel PMI.
Debbie Oliver NMLS License #248252, America's First Choice Mortgage, NMLS License #279234 can answer questions about PMI and many others. Give us a call: 2146635355.