Make Private Mortgage Insurance a Thing of the Past
Although lending institutions have been legally required (for loans closed past July 1999) to cancel Private Mortgage Insurance (PMI) at the point the loan balance gets below 78% of the purchase price, they do not have to cancel PMI automatically if the loan's equity is over 22%. (There are some loans that are excluded -like a number of "high risk' loans.) The good news is that you can cancel your PMI yourself (for your loan that closed after July '99), regardless of the original price of purchase, after the equity reaches twenty percent.
Do your homework
Analyze your monthly statements often. You'll want to stay aware of the prices of the homes that sell around you. If your loan is under five years old, chances are you haven't paid down much principal � it's been mostly interest.
Proof of Equity
As soon as your equity has risen to the required twenty percent, you are close to canceling your PMI payments, for the life of your loan. You will need to notify your mortgage lender that you wish to cancel PMI payments. Lenders request documentation verifying your eligibility at this point. You can get documentation of your home's equity by getting a state certified appraisal using form URAR-1004 (Uniform Residential Appraisal Report), which is required by most lending institutions before canceling PMI.
U.S.A. Lending, Inc. can help find out if you can eliminate your PMI. Call us: 305-967-7200.