Make Private Mortgage Insurance a Thing of the Past
While lenders have been required (for loans closed after July '99) to cancel Private Mortgage Insurance (PMI) at the time the mortgage balance dips below 78% of the price of purchase, they do not have to cancel automatically if the borrower's equity is above 22%. (The law does not apply to certain higher risk mortgages.) The good news is that you can request cancelation of your PMI yourself (for your loan closing after July '99), no matter the original purchase price, after your equity reaches twenty percent.
Verify the numbers
Familiarize yourself with your monthly statements to keep your eye on principal payments. Pay attention to the selling prices of other houses in your immediate area. You are paying mostly interest if your mortgage closed fewer than 5 years ago, so your principal probably hasn't lowered much.
At the point your equity has reached the magic number of twenty percent, you are close to stopping your PMI payments, once and for all. Contact your mortgage lender to request cancellation of PMI. Next, you will be asked to verify that you are eligible to cancel. Usually lenders ask for a state certified appraisal documented on the form: URAR-1004 (Uniform Residential Appraisal Report) to verify your equity and eligibility for canceling PMI.
Executive Lending Group, LLC can answer questions about PMI and many others. Give us a call at (816) 525-8000 & (81.
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