Eliminating Private Mortgage Insurance
Beginning in 1999, lenders have been obligated to cancel a borrower's Private Mortgage Insurance (PMI) at the point his mortgage balance (for loans closed after July of that year) reaches less than seventy-eight percent of the price of purchase, but not at the time the loan's equity reaches twenty-two percent or more. (There are some exceptions -like certain "high risk' loans.) But you have the right to cancel PMI yourself (for loans made past July 1999) at the point your equity reaches 20 percent, without consideration of the original price of purchase.
Keep track of payments
Study your monthly statements often. Pay attention to the purchase prices of other houses in your neighborhood. If your loan is under five years old, probably you haven't made much progress with the principal � it's been mostly interest.
The Proof is in the Appraisal
You can start the process of PMI cancelation when you you think that your equity has reached 20%. You will need to contact the mortgage lender to alert them that you want to cancel PMI. The lending institution will ask for documentation that your equity is high enough. A state certified appraisal documented on the appropriate form (URAR-1004 - Uniform Residential Appraisal Report) documents your equity amount � and your lender will probably require one before they agree to cancel.
Alternative Mortgage Group can answer questions about PMI and many others. Call us at 561-395-4264.