Eliminating Private Mortgage Insurance
While lenders have been obligated (for loans closed past July '99) to cancel Private Mortgage Insurance (PMI) at the time the mortgage balance gets below 78% of the purchase price, they do not have to take similar action if the borrower's equity is over 22%. (Some "higher risk" mortgage loans are not included.) The good news is that you can cancel your PMI yourself (for a mortgage that closed after July '99), regardless of the original purchase price, after the equity gets to twenty percent.
Do your homework
Keep track of money going toward the principal. Pay attention to the prices of other houses in your neighborhood. You are paying mostly interest if the closing was fewer than 5 years ago, so your principal most likely hasn't gone down much.
Verify Equity Amount
You can start the process of canceling your PMI as soon as you you think that your equity has reached 20%. First you will tell your lender that you are asking to cancel PMI. Lending institutions request documentation verifying your eligibility at this point. Usually lenders require a state certified appraisal documented on the form: URAR-1004 (Uniform Residential Appraisal Report) to determine your home's equity and eligibility for canceling PMI.
New Millennium Mortgage Co. NMLS: 331173 can help find out if you can eliminate your PMI. Give us a call at (941) 366-5800.
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