Beginning in 1999, lenders have been required to cancel a borrower's Private Mortgage Insurance (PMI) at the point his mortgage balance (for a loan made after July of that year) goes under seventy-eight percent of the price of purchase, but not at the time the borrower's equity reaches more than twenty-two percent. (A number of "higher risk" mortgage loans are excluded.) But you have the right to cancel PMI yourself (for mortgage loans made after July 1999) at the point your equity rises to 20 percent, regardless of the original purchase price.
Keep a record of payments
Review your statements often. Also keep track of what other homes are selling for in your neighborhood. If your mortgage is under five years old, it's likely you haven't paid down much principal � you have been paying mostly interest.
Once you find you've reached 20 percent equity in your home, you can begin the process of freeing yourself from PMI payments. You will need to call the mortgage lender to let them know that you want to cancel PMI payments. The lending institution will request proof that your equity is at 20 percent or above. 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.
Alternative Mortgage Group can answer questions about PMI and many others. Give us a call at 561-395-4264.