Make Private Mortgage Insurance a Thing of the Past
Although lending institutions have been legally required (for loans closed past July 1999) to cancel Private Mortgage Insurance (PMI) at the point the loan balance goes under 78% of the price of purchase, they do not have to take similar action if the borrower's equity is over 22%. (This law does not apply to some higher risk mortgages.) The good news is that you can request cancelation of your PMI yourself (for your mortgage loan that closed after July '99), regardless of the original price of purchase, at the point your equity gets to twenty percent.
Do your homework
Study your loan statements often. You'll want to stay aware of the the purchase prices of the homes that are selling around you. You've been paying mostly interest if your mortgage loan closed fewer than 5 years ago, so your principal most likely hasn't gone down much.
Proof of Equity
At the point you think you have reached 20 percent equity, you can begin the process of freeing yourself from PMI payments. You will first notify your lender that you are asking to cancel PMI. Lending institutions ask for documentation verifying your eligibility at this point. A state certified appraisal documented on the appropriate form (URAR-1004 - Uniform Residential Appraisal Report) verifies your equity amount � and most lenders request one before they agree to cancel.
Executive Lending Group, LLC can answer questions about PMI and many others. Call us at (816) 525-8000 & (81.
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