Eliminating Private Mortgage Insurance
While lending institutions have been legally required (for loans closed past July 1999) to cancel Private Mortgage Insurance (PMI) at the point the loan balance gets under 78% of the purchase price, they do not have to cancel PMI automatically if the borrower's equity is more than 22%. (Certain "higher risk" mortgage loans are excluded.) But if your equity rises to 20% (regardless of the original purchase price), you have the legal right to cancel PMI (for a mortgage that past July 1999).
Keep a running total of payments
Keep track of money going toward the principal. Pay attention to the prices of other houses in your neighborhood. You are paying mostly interest if the closing was fewer than 5 years ago, so your principal probably hasn't gone down much.
Verify Equity Amount
You can start the process of canceling your PMI as soon as you determine your equity has reached 20%. Call your mortgage lender to ask for cancellation of your Private Mortgage Insurance. Then you will be required to verify that you have at least 20 percent equity. Usually lenders ask for 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 help find out if you can eliminate your PMI. Call us: (941) 954-4252.