Eliminating Private Mortgage Insurance
For loans closed after July 1999, lending institutions are required (by federal law) to automatically cancel Private Mortgage Insurance (PMI) when the loan balance gets below 78 percent of your purchase price � but not at the point the loan reaches 22 percent equity. (There are exceptions -like some loans considered 'high risk'.) The good news is that you can request cancelation of your PMI yourself (for your loan closing after July '99), without considering the original price of purchase, when the equity gets to twenty percent.
Verify the numbers
Keep a running total of money going toward the principal. You'll want to be aware of the the purchase amounts of the homes that are selling around you. If your loan is under five years old, probably you haven't made much progress with the principal � you have been paying mostly interest.
The Proof is in the Appraisal
You can begin the process of PMI cancelation at the time you're sure your equity has reached 20%. You will first tell your lender that you are asking to cancel your PMI. The lending institution will require documentation that your equity is at 20 percent or above. 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 lenders before canceling PMI.
Debbie Oliver NMLS License #248252, America's First Choice Mortgage, NMLS License #279234 can help find out if you can eliminate your PMI. Call us at 2146635355.