Make Private Mortgage Insurance a Thing of the Past
For loans closed after July 1999, lenders are required (by federal law) to automatically cancel Private Mortgage Insurance (PMI) when the loan balance falls below 78 percent of your purchase amount � but not at the point the borrower achieves 22 percent equity. (There are exceptions -like a number of "high risk' loans.) The good news is that you can cancel your PMI yourself (for your mortgage loan closing after July '99), regardless of the original purchase price, after the equity climbs to twenty percent.
Do your homework
Study your statements often. You'll want to stay aware of the the purchase prices of the homes that sell around you. If your mortgage is fewer than five years old, chances are you haven't made much progress with the principal � you have been paying mostly interest.
Verify Equity Amount
You can start the process of PMI cancelation when you're sure your equity reaches 20%. You will first let your lender know that you are requesting to cancel PMI. Next, you will be required to submit proof that you have at least 20 percent equity. A state certified appraisal using the appropriate form (URAR-1004 - Uniform Residential Appraisal Report) will document your equity amount � and most lenders request one before they'll cancel PMI.
At Debbie Oliver NMLS License #248252, America's First Choice Mortgage, NMLS License #279234, we answer questions about PMI every day. Call us at 214-663-5355.