Make Private Mortgage Insurance a Thing of the Past
While lending institutions have been required (for loans closed after July '99) to cancel Private Mortgage Insurance (PMI) when the balance goes below 78% of the purchase price, they do not have to cancel PMI automatically if the borrower's equity is more than 22%. (The legal obligation does not include some higher risk mortgages.) But if your equity reaches 20% (regardless of the original price of purchase), you have the legal right to cancel the PMI (for a loan that after July 1999).
Verify the numbers
Keep a running total of each principal payment. Find out the purchase prices of other houses in your neighborhood. You've been paying mostly interest if your mortgage closed fewer than 5 years ago, so your principal most likely hasn't lowered much.
The Proof is in the Appraisal
When you think you have achieved at least 20 percent equity in your home, you can start the process of canceling your Private Mortgage Insurance. You will need to notify your mortgage lender that you wish to cancel PMI payments. Lending institutions ask for proof of eligibility at this point. A state certified appraisal using the appropriate form (URAR-1004 - Uniform Residential Appraisal Report) is the best proof there is � and your lender will probably request one before they agree to cancel.
Alternative Mortgage Group can answer questions about PMI and many others. Call us at 561-395-4264.