Make Private Mortgage Insurance a Thing of the Past
Although lenders have been obligated (for loans closed past July '99) to cancel Private Mortgage Insurance (PMI) at the time the loan balance goes under 78% of the price of purchase, they do not have to cancel PMI automatically if the borrower's equity is over 22%. (Some "higher risk" mortgage loans are excluded.) However, you can actually cancel PMI yourself (for mortgage loans closed after July 1999) once your equity rises to 20 percent, no matter the original price of purchase.
Verify the numbers
Familiarize yourself with your monthly statements to keep a running total of principal payments. Also stay aware of what other homes are purchased for in your neighborhood. You are paying mostly interest if your mortgage closed fewer than 5 years ago, so your principal probably hasn't gone down much.
Verify Equity Amount
At the point you find you've achieved at least 20 percent equity in your home, you can start the process of getting PMI out of your budget. Contact the lender to request cancellation of your PMI. Lending institutions ask for documentation verifying your eligibility at this point. Most lenders ask for a state certified appraisal documented on the form: URAR-1004 (Uniform Residential Appraisal Report) to verify your equity and eligibility for PMI cancellation.
Prime Capital Mortgage Corp can help find out if you can eliminate your PMI. Call us: 248-644-1200.
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