Since 1999, lending institutions have been required to cancel a borrower's Private Mortgage Insurance (PMI) at the point his loan balance (for loans made past July of '99) goes down below seventy-eight percent of the price of purchase, but not when the borrower's equity climbs to twenty-two percent or higher. (Some "higher risk" loans are excluded.) The good news is that you can request cancelation of your PMI yourself (for a mortgage loan that closed past July '99), without considering the original price of purchase, once the equity rises to twenty percent.
Verify the numbers
Keep a running total of each principal payment. Also be aware of the price that other homes are purchased for 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.
Verify Equity Amount
Once you find you've achieved at least 20 percent equity, you can start the process of canceling your Private Mortgage Insurance. Contact the mortgage lender to ask for cancellation of your PMI. The lending institution will ask for proof that your equity is at 20 percent or above. You can acquire documentation of your home's equity by getting a state certified appraisal using 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. Call us: (816) 525-8000 & (81.
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