Beginning in 1999, lenders have been legally obligated to cancel a borrower's Private Mortgage Insurance (PMI) at the point his mortgage balance (for a loan made past July of that year) goes down below seventy-eight percent of the price of purchase, but not when the loan's equity reaches twenty-two percent or higher. (A number of "higher risk" morgages are not included.) The good news is that you can cancel your PMI yourself (for a mortgage loan closing after July '99), no matter the original purchase price, at the point your equity rises to twenty percent.
Do your homework
Study your loan statements often. You'll want to be aware of the the purchase prices of the houses that are selling in your neighborhood. If your loan is fewer than five years old, it's likely you haven't made much progress with the principal � you have paid mostly interest.
Verify Equity Amount
At the point you determine you've achieved at least 20 percent equity in your home, you can begin the process of getting PMI out of your budget. Contact the mortgage lender to ask for cancellation of your Private Mortgage Insurance. Lenders 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 help find out if you can eliminate your PMI. Call us at (941) 366-5800.
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