Beginning in 1999, lending institutions have been legally required to cancel a borrower's Private Mortgage Insurance (PMI) at the point his mortgage balance (for loans made past July of '99) goes under seventy-eight percent of the purchase price, but not when the loan's equity climbs to over twenty-two percent. (Certain "higher risk" morgages are not included.) However, if your equity rises to 20% (no matter what the original purchase price was), you have the legal right to cancel PMI (for a mortgage loan that after July 1999).
Do your homework
Keep track of each principal payment. Also be aware of how much other homes are being sold for in your neighborhood. You are paying mostly interest if your loan closed fewer than 5 years ago, so your principal most likely hasn't been reduced by much.
Verify Equity Amount
Once your equity has risen to the magic number of twenty percent, you are not far away from stopping your PMI payments, once and for all. Contact your lender to ask for cancellation of PMI. Then you will be asked to verify that you are eligible to cancel. A state certified appraisal using 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.
Iltis Lending Group can help find out if you can eliminate your PMI. Give us a call at (941) 954-4252.