Make Private Mortgage Insurance a Thing of the Past
For loans closed since July 1999, lenders are required (by federal law) to automatically cancel Private Mortgage Insurance (PMI) when the balance of the loan goes below 78 percent of the purchase amount � but not when the borrower earns 22 percent equity. (Certain "higher risk" morgages are not included.) The good news is that you can cancel your PMI yourself (for your mortgage closing after July '99), regardless of the original purchase price, when the equity climbs to twenty percent.
Do your homework
Keep track of each principal payment. Also keep track of the price that other homes are selling for in your neighborhood. You've been paying mostly interest if your closing was fewer than 5 years ago, so your principal most likely hasn't lowered much.
Verify Equity Amount
As soon as your equity has risen to the required twenty percent, you are not far away from getting rid of your PMI payments, once and for all. Contact the mortgage lender to request cancellation of your Private Mortgage Insurance. Lending institutions require proof of eligibility at this point. Usually lenders require a state certified appraisal documented on the form: URAR-1004 (Uniform Residential Appraisal Report) to determine your home's equity and eligibility for PMI cancellation.
Executive Lending Group, LLC can help find out if you can eliminate your PMI. Call us at (816) 525-8000.
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