Beginning in 1999, lenders have been required to cancel a borrower's Private Mortgage Insurance (PMI) when his mortgage balance (for a loan made past July of that year) reaches less than seventy-eight percent of the price of purchase, but not when the borrower's equity reaches over twenty-two percent. (The legal obligation does not cover some higher risk mortgages.) But you have the right to cancel PMI yourself (for mortgage loans made past July 1999) when your equity gets to 20 percent, without consideration of the original price of purchase.
Verify the numbers
Analyze your statements often. You'll want to be aware of the the purchase prices of the houses that sell 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.
Proof of Equity
At the point your equity has risen to the magic number of twenty percent, you are just a few steps away from canceling your PMI payments, for the life of your loan. Contact your lending institution to ask for cancellation of your Private Mortgage Insurance. Next, you will be required to submit proof that you are eligible to cancel. A state certified appraisal documented on the appropriate form (URAR-1004 - Uniform Residential Appraisal Report) is the best proof there is � and almost all lenders require one before they agree to cancel PMI.
Iltis Lending Group can help find out if you can eliminate your PMI. Give us a call at (941) 954-4252.