Since 1999, lending institutions have been legally obligated to cancel a borrower's Private Mortgage Insurance (PMI) at the point his mortgage balance (for a loan closed past July of that year) reaches less than seventy-eight percent of the price of purchase, but not at the time the loan's equity climbs to more than twenty-two percent. (There are exceptions -like certain "high risk' loans.) However, you can actually cancel PMI yourself (for loans closed after July 1999) once your equity reaches 20 percent, no matter the original price of purchase.
Keep track of payments
Keep a running total of each principal payment. You'll want to keep track of the the purchase amounts of the homes that are selling in your neighborhood. You've been paying mostly interest if you closed your mortgage loan fewer than 5 years ago, so your principal probably hasn't gone down much.
Proof of Equity
At the point you determine you have reached 20 percent equity in your home, you can begin the process of getting PMI out of your budget. You will first let your lender know that you are requesting to cancel your PMI. Lending institutions ask for proof of eligibility at this point. 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.
Got a Question?
Do you have a question? We can help. Simply fill out the form below and we'll contact you with the answer, with no obligation to you. We guarantee your privacy.