Beginning in 1999, lenders have been obligated to cancel a borrower's Private Mortgage Insurance (PMI) when his loan balance (for a loan made after July of that year) goes under seventy-eight percent of the price of purchase, but not when the borrower's equity gets to over twenty-two percent. (Some "higher risk" morgages are excluded.) The good news is that you can request cancelation of your PMI yourself (for a loan closing past July '99), no matter the original price of purchase, once the equity climbs to twenty percent.
Keep a record of payments
Keep track of money going toward the principal. Also be aware of the price that other homes are purchased for in your neighborhood. You've been paying mostly interest if you closed your mortgage fewer than 5 years ago, so your principal probably hasn't been reduced by much.
Proof of Equity
When you determine you have reached 20 percent equity, you can begin the process of getting PMI out of your budget. You will need to notify your mortgage lender that you wish to cancel PMI. Next, you will be required to verify that you have at least 20 percent equity. A state certified appraisal documented on the appropriate form (URAR-1004 - Uniform Residential Appraisal Report) documents your equity amount � and most lending institutions will require one before they'll cancel 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.