Make Private Mortgage Insurance a Thing of the Past
For loans made after July 1999, lending institutions are required (by federal law) to automatically cancel Private Mortgage Insurance (PMI) when the loan balance gets lower than 78 percent of the purchase price � but not at the point the loan reaches 22 percent equity. (There are some exceptions -like some "high risk' loans.) The good news is that you can request cancelation of your PMI yourself (for your mortgage loan that closed after July '99), without considering the original price of purchase, once your equity climbs to twenty percent.
Keep track of payments
Familiarize yourself with your loan statements to keep your eye on principal payments. You'll want to stay aware of the the purchase prices of the homes that sell in your neighborhood. You've been paying mostly interest if you closed your loan fewer than 5 years ago, so your principal most likely hasn't gone down much.
The Proof is in the Appraisal
When you determine you have achieved at least 20 percent equity, you can begin the process of getting PMI out of your budget. You will first notify your lender that you are requesting to cancel PMI. Your lender will ask for documentation that your equity is high enough. A state certified appraisal using the appropriate form (URAR-1004 - Uniform Residential Appraisal Report) is the best proof there is � and your lender will probably request one before they'll cancel 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: 2146635355.