Eliminating Private Mortgage Insurance
Although lenders have been legally required (for loans closed after July '99) to cancel Private Mortgage Insurance (PMI) at the time the loan balance gets under 78% of the purchase price, they do not have to cancel PMI automatically if the loan's equity is over 22%. (There are exceptions -like some loans considered 'high risk'.) The good news is that you can request cancelation of your PMI yourself (for your mortgage loan closing past July '99), without considering the original price of purchase, after your equity climbs to twenty percent.
Keep a record of payments
Analyze your loan statements often. Also stay aware of how much other homes are selling for in your neighborhood. If your mortgage is fewer than five years old, probably you haven't greatly reduced principal � you have been paying mostly interest.
Verify Equity Amount
You can begin the process of PMI cancelation at the time you calculate that your equity has risen to 20%. First you will let your lender know that you are requesting to cancel your PMI. Then you will be required to verify that you are eligible to cancel. A state certified appraisal using the appropriate form (URAR-1004 - Uniform Residential Appraisal Report) is all the proof you need � and your lender will probably request one before they'll cancel PMI.
U.S.A. Lending, Inc. can help find out if you can eliminate your PMI. Call us at 305-967-7200.