Make Private Mortgage Insurance a Thing of the Past
For loans made since July 1999, lending institutions are required (by federal law) to automatically cancel Private Mortgage Insurance (PMI) when the balance of the loan falls under 78 percent of your purchase price � but not at the point the loan reaches 22 percent equity. (There are exceptions -like some "high risk' loans.) But you have the right to cancel PMI yourself (for loans made after July 1999) once your equity reaches 20 percent, without consideration of the original purchase price.
Verify the numbers
Keep a running total of money going toward the principal. Also be aware of how much other homes are purchased for in your neighborhood. You've been paying mostly interest if your mortgage loan closed fewer than 5 years ago, so your principal most likely hasn't lowered much.
The Proof is in the Appraisal
You can begin the process of canceling PMI at the time you're sure your equity reaches 20%. You will first let your lending institution know that you are asking to cancel your PMI. Then you will be asked to submit proof that you have at least 20 percent equity. Usually lenders require a state certified appraisal documented on the form: URAR-1004 (Uniform Residential Appraisal Report) to determine your home's equity and eligibility for PMI cancellation.
Alternative Mortgage Group can help find out if you can eliminate your PMI. Call us: 561-395-4264.