Beginning in 1999, lending institutions have been obligated to cancel a borrower's Private Mortgage Insurance (PMI) at the point his loan balance (for loans made past July of '99) goes beneath seventy-eight percent of the price of purchase, but not when the loan's equity climbs to twenty-two percent or higher. (The legal obligation does not apply to some higher risk mortgages.) But if your equity rises to 20% (no matter what the original price was), you are able to cancel PMI (for a mortgage that after July 1999).
Keep track of payments
Study your monthly statements often. You'll want to keep track of the the purchase prices of the homes that sell in your neighborhood. You are paying mostly interest if you closed your loan fewer than 5 years ago, so your principal probably hasn't been reduced by much.
The Proof is in the Appraisal
Once your equity has reached the desired twenty percent, you are close to getting rid of your PMI payments, once and for all. Call the lending institution to request cancellation of your PMI. Next, you will be asked to verify that you have at least 20 percent equity. Most 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 PMI cancellation.
At Iltis Lending Group, we answer questions about PMI every day. Give us a call at (941) 954-4252.