Make Private Mortgage Insurance a Thing of the Past
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Since 1999, lenders have been legally obligated to cancel a borrower's Private Mortgage Insurance (PMI) at the point his mortgage balance (for loans made past July of that year) goes beneath seventy-eight percent of the price of purchase, but not at the time the loan's equity climbs to over twenty-two percent. (There are exceptions -like some loans considered 'high risk'.) But if your equity reaches 20% (regardless of the original purchase price), you have the legal right to cancel PMI (for a loan that after July 1999).
Verify the numbers
Keep track of money going toward the principal. Also keep track of the price that other homes are purchased for in your neighborhood. If your loan is under five years old, probably you haven't paid down much principal - you have been paying mostly interest.
Proof of Equity
As soon as your equity has reached the required twenty percent, you are close to stopping your PMI payments, for the life of your loan. Contact the lending institution to request cancellation of PMI. Lenders require paperwork verifying your eligibility at this point. A state certified appraisal documented on the appropriate form (URAR-1004 - Uniform Residential Appraisal Report) is all the proof you need - and most lending institutions require one before they agree to cancel PMI.
At SMI Lending, Inc., we answer questions about PMI every day. Call us: (972) 818-0022.