Beginning in 1999, lenders have been legally required to cancel a borrower's Private Mortgage Insurance (PMI) at the point his loan balance (for loans made past July of that year) goes down below seventy-eight percent of the purchase price, but not at the time the loan's equity gets to higher than twenty-two percent. (There are some exceptions -like some loans considered 'high risk'.) The good news is that you can request cancelation of your PMI yourself (for a mortgage loan closing after July '99), without considering the original purchase price, at the point your equity rises to twenty percent.
Verify the numbers
Keep a running total of your principal payments. Pay attention to the purchase prices of other houses in your neighborhood. If your mortgage is fewer than five years old, probably you haven't paid down much principal � it's been mostly interest.
Proof of Equity
Once you determine you have reached 20 percent equity in your home, you can start the process of getting PMI out of your budget. Call the lending institution to request cancellation of PMI. Your lender will ask for documentation that your equity is high enough. Most lenders ask for a state certified appraisal documented on the form: URAR-1004 (Uniform Residential Appraisal Report) to determine your equity and eligibility for canceling PMI.
At Executive Lending Group, LLC, we answer questions about PMI every day. Give us a call at (816) 525-8000 & (81.
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