Canceling Private Mortgage Insurance
While lending institutions have been legally obligated (for loans closed past July '99) to cancel Private Mortgage Insurance (PMI) when the loan balance dips below 78% of the purchase price, they do not have to cancel PMI automatically if the borrower's equity is more than 22%. (There are some loans that are not included -like some "high risk' loans.) The good news is that you can cancel your PMI yourself (for a mortgage loan that closed past July '99), regardless of the original price of purchase, once your equity reaches twenty percent.
Keep a record of payments
Analyze your statements often. Pay attention to the selling prices of other houses in your immediate area. If your loan is fewer than five years old, probably you haven't made much progress with the principal � you have been paying mostly interest.
Once you find you have reached 20 percent equity in your home, you can begin the process of freeing yourself from PMI payments. Call the mortgage lender to ask for cancellation of PMI. Lenders request documentation 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 most lending institutions require one before they'll cancel PMI.
Executive Lending Group, LLC can answer questions about PMI and many others. Give us a call: (816) 525-8000 & (81.
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