Canceling Private Mortgage Insurance
While lenders have been required (for loans closed after July 1999) to cancel Private Mortgage Insurance (PMI) at the time the balance dips below 78% of the purchase price, they do not have to cancel automatically if the equity is above 22%. (Some "higher risk" mortgage loans are not included.) The good news is that you can cancel your PMI yourself (for a loan closing after July '99), without considering the original price of purchase, at the point your equity gets to twenty percent.
Verify the numbers
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 paid down much principal � you have been paying mostly interest.
Verify Equity Amount
You can start the process of PMI cancelation at the time you're sure your equity has reached 20%. You will need to call the lending institution to alert them that you wish to cancel PMI. Then you will be asked to verify that you have at least 20 percent equity. The best proof there is can be found in a state certified appraisal on form URAR-1004 (Uniform Residential Appraisal Report), which is required by most lenders before canceling PMI.
At Executive Lending Group, LLC, we answer questions about PMI every day. Give us a call: (816) 525-8000 & (81.
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