Beginning in 1999, lenders have been legally obligated to cancel a borrower's Private Mortgage Insurance (PMI) at the point his loan balance (for loans closed past July of '99) reaches less than seventy-eight percent of the purchase price, but not when the loan's equity reaches twenty-two percent or more. (There are exceptions -like certain "high risk' loans.) The good news is that you can request cancelation of your PMI yourself (for a loan that closed after July '99), without considering the original price of purchase, at the point your equity rises to twenty percent.
Keep a running total of payments
Keep track of each principal payment. Also be aware of the price that other homes are purchased for in your neighborhood. Unfortunately, if you have a new mortgage - five years or fewer, you probably haven't begun to pay a lot of the principal: you have been paying mostly interest.
Verify Equity Amount
At the point you think you've reached 20 percent equity in your home, you can begin the process of freeing yourself from PMI payments. Call your lending institution to request cancellation of your PMI. Your lender will ask for documentation that your equity is at 20 percent or above. You can acquire proof of your home's equity by getting a state certified appraisal on form URAR-1004 (Uniform Residential Appraisal Report), required by most lenders before canceling PMI.
Iltis Lending Group can help find out if you can eliminate your PMI. Give us a call: (941) 954-4252.