Make Private Mortgage Insurance a Thing of the Past
For loans made since July 1999, lending institutions are obligated (by federal law) to automatically cancel Private Mortgage Insurance (PMI) when the loan balance gets lower than 78 percent of your purchase amount � but not when the loan reaches 22 percent equity. (Some "higher risk" morgages are not included.) The good news is that you can cancel your PMI yourself (for your loan closing after July '99), without considering the original price of purchase, at the point the equity rises to twenty percent.
Do your homework
Keep a running total of your principal payments. Also keep track of the price that other homes are selling for in your neighborhood. You are paying mostly interest if your loan closed fewer than 5 years ago, so your principal most likely hasn't been reduced by much.
Verify Equity Amount
You can start the process of canceling PMI as soon as you determine your equity has risen to 20%. You will need to notify your mortgage lender that you want to cancel PMI payments. The lending institution will ask for proof that your equity is high enough. You can acquire documentation of your equity by getting a state certified appraisal on form URAR-1004 (Uniform Residential Appraisal Report), required by most lenders before canceling PMI.
Alternative Mortgage Group can help find out if you can eliminate your PMI. Give us a call: 561-395-4264.