Make Private Mortgage Insurance a Thing of the Past
For loans closed since July 1999, lenders are required (by federal law) to automatically cancel Private Mortgage Insurance (PMI) when the loan balance gets lower than 78 percent of the purchase amount � but not when the loan reaches 22 percent equity. (A number of "higher risk" loan programs are excluded.) The good news is that you can request cancelation of your PMI yourself (for your mortgage that closed past July '99), without considering the original purchase price, after the equity reaches twenty percent.
Verify the numbers
Keep track of money going toward the principal. You'll want to stay aware of the the purchase prices of the homes that are selling in your neighborhood. If your loan is under five years old, probably you haven't greatly reduced principal � it's been mostly interest.
The Proof is in the Appraisal
You can begin the process of PMI cancelation at the time you you think that your equity has risen to 20%. You will need to call your mortgage lender to alert them that you wish to cancel PMI. Lenders ask for paperwork verifying your eligibility at this point. Most lenders require a state certified appraisal documented on the form: URAR-1004 (Uniform Residential Appraisal Report) to verify your equity and eligibility for canceling PMI.
At Iltis Lending Group, we answer questions about PMI every day. Call us at (941) 954-4252.