Make Private Mortgage Insurance a Thing of the Past
While lending institutions have been obligated (for loans closed past July 1999) to cancel Private Mortgage Insurance (PMI) at the point the balance goes under 78% of the price of purchase, they do not have to cancel automatically if the borrower's equity is above 22%. (Certain "higher risk" loan programs are not included.) But you can actually cancel PMI yourself (for loans made past July 1999) when your equity gets to 20 percent, regardless of the original price of purchase.
Keep a record of payments
Keep a running total of each principal payment. You'll want to be aware of the the purchase prices of the houses that are selling in your neighborhood. Unfortunately, if yours is a new mortgage loan - five years or fewer, you likely haven't had a chance to pay a lot of the principal: you have been paying mostly interest.
The Proof is in the Appraisal
As soon as your equity has reached the desired twenty percent, you are just a few steps away from stopping your PMI payments, once and for all. You will need to contact the lending institution to let them know that you want to cancel PMI payments. The lending institution will request proof that your equity is at 20 percent or above. You can acquire proof of your home's equity by getting a state certified appraisal on form URAR-1004 (Uniform Residential Appraisal Report), which is required by most lenders before canceling PMI.
New Millennium Mortgage Co. NMLS: 331173 can help find out if you can eliminate your PMI. Call us at (941) 366-5800.
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