Make Private Mortgage Insurance a Thing of the Past
Beginning in 1999, lending institutions have been obligated to cancel a borrower's Private Mortgage Insurance (PMI) at the point his loan balance (for a loan made after July of that year) reaches less than seventy-eight percent of the purchase price, but not when the borrower's equity reaches twenty-two percent or more. (The legal obligation does not include certain higher risk mortgages.) However, you are able to cancel PMI yourself (for mortgages closed past July 1999) once your equity rises to 20 percent, regardless of the original price of purchase.
Do your homework
Familiarize yourself with your mortgage statements to keep track of principal payments. You'll want to be aware of the the purchase amounts of the houses that sell around you. Unfortunately, if you have a new mortgage loan - five years or under, you likely haven't started to pay a lot of the principal: you are paying mostly interest.
You can start the process of canceling your PMI at the time you you think that your equity reaches 20%. Call the lending institution to ask for cancellation of your PMI. Lending institutions request proof of eligibility at this point. Usually lenders ask for a state certified appraisal documented on the form: URAR-1004 (Uniform Residential Appraisal Report) to verify your equity and eligibility for canceling PMI.
Alternative Mortgage Group can help find out if you can eliminate your PMI. Call us: 561-395-4264.