Canceling Private Mortgage Insurance
Since 1999, lending institutions have been legally required to cancel a borrower's Private Mortgage Insurance (PMI) at the point his mortgage balance (for a loan made past July of '99) reaches less than seventy-eight percent of the purchase price, but not when the borrower's equity gets to over twenty-two percent. (Certain "higher risk" loan programs are excluded.) The good news is that you can cancel your PMI yourself (for a loan closing after July '99), without considering the original price of purchase, once the equity climbs to twenty percent.
Do your homework
Familiarize yourself with your loan statements to keep track of principal payments. Also be aware of how much other homes are purchased for in your neighborhood. If your loan is under five years old, probably you haven't made much progress with the principal � it's been mostly interest.
Verify Equity Amount
As soon as your equity has risen to the magic number of twenty percent, you are just a few steps away from getting rid of your PMI payments, for the life of your loan. You will need to notify your mortgage lender that you wish to cancel PMI. Then you will be asked to submit documentation that you are eligible to cancel. A state certified appraisal documented on the appropriate form (URAR-1004 - Uniform Residential Appraisal Report) is all the proof you need � and almost all lending institutions request one before they'll cancel PMI.
Prime Capital Mortgage Corp can help find out if you can eliminate your PMI. Call us: 248-644-1200.
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