Make Private Mortgage Insurance a Thing of the Past
For loans made since July 1999, lenders are obligated (by federal law) to automatically cancel Private Mortgage Insurance (PMI) when the balance of the loan gets below 78 percent of the purchase amount � but not when the loan reaches 22 percent equity. (There are some exceptions -like some "high risk' loans.) The good news is that you can cancel your PMI yourself (for a mortgage that closed after July '99), regardless of the original price of purchase, once your equity reaches twenty percent.
Keep track of payments
Study your statements often. Also be aware of how much other homes are purchased for in your neighborhood. You've been paying mostly interest if your closing was fewer than 5 years ago, so your principal most likely hasn't lowered much.
Verify Equity Amount
As soon as your equity has reached the required twenty percent, you are just a few steps away from stopping your PMI payments, for the life of your loan. You will need to notify your mortgage lender that you want to cancel PMI payments. Then you will be required to submit documentation that you are eligible to cancel. A state certified appraisal documented on the appropriate form (URAR-1004 - Uniform Residential Appraisal Report) will document your equity amount � and almost all lending institutions require one before they agree to cancel PMI.
U.S.A. Lending, Inc. can help find out if you can eliminate your PMI. Give us a call at 305-967-7200.