Make Private Mortgage Insurance a Thing of the Past
For loans made after July 1999, lenders are required (by federal law) to automatically cancel Private Mortgage Insurance (PMI) when the loan balance goes lower than 78 percent of the purchase price � but not at the point the borrower achieves 22 percent equity. (There are some exceptions -like certain "high risk' loans.) But if your equity gets to 20% (regardless of the original purchase price), you are able to cancel PMI (for a mortgage loan that after July 1999).
Keep a record of payments
Study your statements often. Pay attention to the purchase prices of other homes in your immediate area. If your loan is fewer than five years old, probably you haven't paid down much principal � you have paid mostly interest.
Verify Equity Amount
At the point you think you have reached 20 percent equity, you can start the process of canceling your Private Mortgage Insurance. You will need to notify your mortgage lender that you wish to cancel PMI. Your lender will request documentation that your equity is at 20 percent or above. Most lenders ask for a state certified appraisal documented on the form: URAR-1004 (Uniform Residential Appraisal Report) to determine your home's equity and eligibility for canceling PMI.
American Mortgage Advisers, Inc can answer questions about PMI and many others. Give us a call at 214-865-7442.
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.