Canceling Private Mortgage Insurance
While lenders have been obligated (for loans closed past July 1999) to cancel Private Mortgage Insurance (PMI) when the mortgage balance goes under 78% of the purchase price, they do not have to take similar action if the equity is over 22%. (Some "higher risk" mortgage loans are not included.) However, if your equity reaches 20% (no matter what the original purchase price was), you have the legal right to cancel PMI (for a loan that after July 1999).
Verify the numbers
Familiarize yourself with your loan statements to keep a running total of principal payments. You'll want to be aware of the prices of the houses that are selling around you. You are paying mostly interest if your loan closed fewer than 5 years ago, so your principal probably hasn't been reduced by much.
You can start the process of PMI cancelation as soon as you determine your equity has risen to 20%. Contact your mortgage lender to request cancellation of your Private Mortgage Insurance. Lending institutions ask for paperwork verifying your eligibility at this point. A state certified appraisal documented on the appropriate form (URAR-1004 - Uniform Residential Appraisal Report) is all the proof you need � and almost all lenders will require one before they agree to cancel PMI.
U.S.A. Lending, Inc. can help find out if you can eliminate your PMI. Call us: 305-967-7200.