Make Private Mortgage Insurance a Thing of the Past
For loans made since July 1999, lenders are obligated (by federal law) to automatically cancel Private Mortgage Insurance (PMI) when the loan balance gets under 78 percent of the purchase amount � but not at the point the loan reaches 22 percent equity. (There are exceptions -like some loans considered 'high risk'.) But if your equity rises to 20% (no matter what the original purchase price was), you have the legal right to cancel your PMI (for a loan closed after July 1999).
Do your homework
Study your mortgage statements often. Pay attention to the selling prices of other homes in your neighborhood. If your loan is fewer than five years old, probably you haven't made much progress with the principal � you have been paying mostly interest.
Once you find you have achieved at least 20 percent equity in your home, you can start the process of canceling your Private Mortgage Insurance. You will need to contact your lending institution to alert them that you want to cancel PMI payments. Lending institutions request proof of eligibility at this point. The best proof there is can be found in a state certified appraisal on form URAR-1004 (Uniform Residential Appraisal Report), which is required by most lending institutions before canceling PMI.
At Executive Lending Group, LLC, we answer questions about PMI every day. Give us a call: 8165258000.
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