Make Private Mortgage Insurance a Thing of the Past
Although lenders have been legally obligated (for loans closed past July 1999) to cancel Private Mortgage Insurance (PMI) at the time the mortgage balance goes below 78% of the purchase price, they do not have to cancel PMI automatically if the borrower's equity is more than 22%. (This legal obligation does not apply to some higher risk mortgages.) The good news is that you can request cancelation of your PMI yourself (for a mortgage closing past July '99), regardless of the original purchase price, after the equity climbs to twenty percent.
Keep a record of payments
Familiarize yourself with your monthly statements to keep track of principal payments. Also keep track of how much other homes are purchased for in your neighborhood. If your loan is fewer than five years old, it's likely you haven't greatly reduced principal � it's been mostly interest.
Verify Equity Amount
You can start the process of PMI cancelation when you're sure your equity has risen to 20%. Call your mortgage lender to request cancellation of your Private Mortgage Insurance. Next, you will be required to verify that you have at least 20 percent equity. You can get proof of your home's equity by getting a state certified appraisal using form URAR-1004 (Uniform Residential Appraisal Report), required by most lending institutions before canceling PMI.
New Millennium Mortgage Co. NMLS: 331173 can answer questions about PMI and many others. Give us a call: (941) 366-5800.
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