Beginning in 1999, lenders have been required to cancel a borrower's Private Mortgage Insurance (PMI) when his loan balance (for a loan closed past July of that year) goes under seventy-eight percent of the price of purchase, but not when the borrower's equity gets to higher than twenty-two percent. (Some "higher risk" mortgage loans are not included.) The good news is that you can request cancelation of your PMI yourself (for a mortgage loan that closed after July '99), without considering the original price of purchase, once the equity rises to twenty percent.
Keep a record of payments
Familiarize yourself with your monthly statements to keep your eye on principal payments. You'll want to stay aware of the the purchase amounts of the homes that are selling around you. You've been paying mostly interest if your mortgage closed fewer than 5 years ago, so your principal probably hasn't gone down much.
The Proof is in the Appraisal
As soon as your equity has reached the required twenty percent, you are close to getting rid of your PMI payments, once and for all. Contact the mortgage lender to ask for cancellation of your Private Mortgage Insurance. Then you will be asked to submit documentation that you have at least 20 percent equity. A state certified appraisal using the appropriate form (URAR-1004 - Uniform Residential Appraisal Report) is the best proof there is � and your lender will probably request one before they agree to cancel PMI.
Executive Lending Group, LLC can answer questions about PMI and many others. Give us a call at 8165258000.
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