Canceling Private Mortgage Insurance
For loans made after July 1999, lenders are obligated (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. (Some "higher risk" mortgage loans are excluded.) But you have the right to cancel PMI yourself (for mortgages closed past July 1999) once your equity rises to 20 percent, no matter the original purchase price.
Do your homework
Analyze your statements often. Also stay aware of what 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 been reduced by much.
Verify Equity Amount
Once your equity has reached the magic number of twenty percent, you are just a few steps away from stopping your PMI payments, once and for all. You will first tell your lender that you are requesting to cancel your PMI. Next, you will be required to verify that you are eligible to cancel. Usually lenders require a state certified appraisal documented on the form: URAR-1004 (Uniform Residential Appraisal Report) to determine your equity and eligibility for canceling PMI.
Contemporary Mortgage Services, Inc can answer questions about PMI and many others. Call us at 407-834-3377.
Got a Question?
Do you have a question? We can help. Simply fill out the form below and we'll contact you with the answer, with no obligation to you. We guarantee your privacy.