Make Private Mortgage Insurance a Thing of the Past
For loans made after July 1999, lending institutions are required (by federal law) to automatically cancel Private Mortgage Insurance (PMI) when the loan balance goes lower than 78 percent of the purchase price � but not at the point the loan reaches 22 percent equity. (This law does not apply to some higher risk mortgages.) The good news is that you can cancel your PMI yourself (for a mortgage loan that closed after July '99), without considering the original purchase price, once the equity rises to twenty percent.
Keep track of payments
Familiarize yourself with your loan statements to keep a running total of principal payments. Also keep track of how much other homes are selling for in your neighborhood. You are paying mostly interest if your mortgage closed fewer than 5 years ago, so your principal probably hasn't lowered much.
The Proof is in the Appraisal
You can start the process of canceling PMI when you're sure your equity reaches 20%. First you will let your lending institution know that you are requesting to cancel PMI. Lenders ask for proof of eligibility at this point. 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 canceling PMI.
Iltis Lending Group can answer questions about PMI and many others. Call us at (941) 954-4252.