Canceling Private Mortgage Insurance
For loans closed since July 1999, lending institutions are required (by federal law) to automatically cancel Private Mortgage Insurance (PMI) when the balance of the loan goes under 78 percent of your purchase amount � but not at the point the borrower earns 22 percent equity. (The legal requirment does not apply to a number of higher risk mortgages.) The good news is that you can cancel your PMI yourself (for a loan that closed past July '99), no matter the original price of purchase, once the equity climbs to twenty percent.
Keep a running total of payments
Study your statements often. Make yourself aware of the purchase prices of other homes in your neighborhood. If your mortgage is under five years old, chances are you haven't made much progress with the principal � it's been mostly interest.
You can begin the process of canceling your PMI when you're sure your equity has risen to 20%. Contact the lending institution to ask for cancellation of your Private Mortgage Insurance. The lending institution will ask for documentation that your equity is high enough. The best proof there is can be found in 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. Give us a call at 305-967-7200.