Canceling Private Mortgage Insurance
Beginning in 1999, lenders have been legally required to cancel a borrower's Private Mortgage Insurance (PMI) at the point his loan balance (for a loan closed after July of that year) goes below seventy-eight percent of the price of purchase, but not at the time the borrower's equity reaches higher than twenty-two percent. (Certain "higher risk" loan programs are excluded.) However, if your equity rises to 20% (no matter what the original price was), you have the legal right to cancel your PMI (for a loan that past July 1999).
Verify the numbers
Keep a running total of each principal payment. You'll want to keep track of the the purchase amounts of the homes that sell in your neighborhood. Unfortunately, if yours is a recent mortgage loan - five years or under, you probably haven't had a chance to pay very much of the principal: you are paying mostly interest.
Verify Equity Amount
You can start the process of PMI cancelation when you you think that your equity reaches 20%. Call the lender to request cancellation of your PMI. Lenders ask for documentation verifying your eligibility at this point. A state certified appraisal using the appropriate form (URAR-1004 - Uniform Residential Appraisal Report) is the best proof there is � and almost all lenders request one before they agree to cancel PMI.
Tier One Mortgage, LLC can answer questions about PMI and many others. Give us a call: (585) 282-0960.