For loans made since July 1999, lending institutions are required (by federal law) to automatically cancel Private Mortgage Insurance (PMI) when the loan balance falls under 78 percent of the purchase price � but not at the point the borrower achieves 22 percent equity. (A number of "higher risk" mortgage loans are excluded.) But if your equity reaches 20% (regardless of the original price of purchase), you can cancel PMI (for a mortgage that after July 1999).
Do your homework
Keep track of each principal payment. Make yourself aware of the prices of other homes in your immediate area. You are paying mostly interest if you closed your loan fewer than 5 years ago, so your principal most likely hasn't been reduced by much.
The Proof is in the Appraisal
Once you think you have reached 20 percent equity in your home, you can begin the process of getting PMI out of your budget. You will need to notify your mortgage lender that you want to cancel PMI. Lending institutions ask for paperwork verifying your eligibility at this point. The best proof there is can be found in a state certified appraisal on form URAR-1004 (Uniform Residential Appraisal Report), required by most lending institutions before canceling PMI.
Iltis Lending Group can help find out if you can eliminate your PMI. Give us a call: (941) 954-4252.