Make Private Mortgage Insurance a Thing of the Past
Beginning in 1999, lending institutions have been legally required to cancel a borrower's Private Mortgage Insurance (PMI) when his mortgage balance (for a loan closed after July of that year) reaches less than seventy-eight percent of the purchase price, but not when the borrower's equity climbs to twenty-two percent or more. (Certain "higher risk" morgages are excluded.) However, if your equity gets to 20% (no matter what the original price was), you have the right to cancel your PMI (for a loan closed after July 1999).
Verify the numbers
Familiarize yourself with your monthly statements to keep a running total of principal payments. Pay attention to the prices of other homes in your immediate area. Unfortunately, if yours is a recent mortgage - five years or fewer, you likely haven't had a chance to pay a lot of the principal: you are paying mostly interest.
Proof of Equity
As soon as your equity has reached the required twenty percent, you are close to getting rid of your PMI payments, once and for all. You will first notify your lender that you are requesting to cancel your PMI. The lending institution will require proof that your equity is at 20 percent or above. You can get documentation of your equity by getting a state certified appraisal on form URAR-1004 (Uniform Residential Appraisal Report), which is required by most lending institutions before canceling PMI.
Ward Kilduff Mortgage can help find out if you can eliminate your PMI. Call us: (860) 658-7100.
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