Make Private Mortgage Insurance a Thing of the Past
Although lending institutions have been required (for loans closed after July '99) to cancel Private Mortgage Insurance (PMI) when the balance gets below 78% of the price of purchase, they do not have to take similar action if the borrower's equity is over 22%. (A number of "higher risk" mortgage loans are excluded.) But if your equity rises to 20% (regardless of the original purchase price), you are able to cancel your PMI (for a mortgage loan closed after July 1999).
Verify the numbers
Familiarize yourself with your mortgage statements to keep a running total of principal payments. You'll want to be aware of the the purchase prices of the houses that sell in your neighborhood. You've been paying mostly interest if you closed your loan fewer than 5 years ago, so your principal most likely hasn't gone down much.
Verify Equity Amount
You can start the process of canceling your PMI as soon as you you think that your equity has reached 20%. First you will notify your lender that you are requesting to cancel PMI. Then you will be required to verify that you have at least 20 percent equity. Most lenders require a state certified appraisal documented on the form: URAR-1004 (Uniform Residential Appraisal Report) to verify your home's equity and eligibility for PMI cancellation.
Ward Kilduff Mortgage can help find out if you can eliminate your PMI. Call us: (860) 658-7100.
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