Make Private Mortgage Insurance a Thing of the Past
Although lenders have been required (for loans closed past July 1999) to cancel Private Mortgage Insurance (PMI) at the time the balance dips under 78% of the purchase price, they do not have to cancel automatically if the equity is above 22%. (There are some loans that are excluded -like certain "high risk' loans.) However, you can actually cancel PMI yourself (for mortgages made past July 1999) once your equity reaches 20 percent, without consideration of the original price of purchase.
Do your homework
Familiarize yourself with your monthly statements to keep a running total of principal payments. Also stay aware of what other homes are selling for in your neighborhood. Unfortunately, if yours is a recent mortgage - five years or fewer, you likely haven't had a chance to pay a lot of the principal: you are paying mostly interest.
Proof of Equity
You can begin the process of canceling your PMI when you're sure your equity has risen to 20%. First you will let your lender know that you are requesting to cancel your PMI. Then you will be asked to submit documentation that you are eligible to cancel. The best proof there is can be found in a state certified appraisal on form URAR-1004 (Uniform Residential Appraisal Report), which is required by most lending institutions before canceling PMI.
New Millennium Mortgage Co. NMLS: 331173 can answer questions about PMI and many others. Call us at (941) 366-5800.
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