Make Private Mortgage Insurance a Thing of the Past
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Beginning in 1999, lending institutions have been legally obligated to cancel a borrower's Private Mortgage Insurance (PMI) when the mortgage balance (for a loan made past July of that year) goes down below seventy-eight percent of the price of purchase, but not when the loan's equity climbs to twenty-two percent or more. (Some "higher risk" mortgage loans are not included.) However, if your equity gets to 20% (no matter what the original price was), you have the legal right to cancel the PMI (for a mortgage loan that after July 1999).
Keep a record of payments
Analyze your mortgage statements often. Also keep track of how much other homes are selling for in your neighborhood. If your mortgage is under five years old, chances are you haven't greatly reduced principal - it's been mostly interest.
Verify Equity Amount
At the point your equity has reached the required twenty percent, you are just a few steps away from canceling your PMI payments, once and for all. You will need to call your mortgage lender to alert them that you want to cancel PMI payments. Lending institutions ask for proof of eligibility at this point. A state certified appraisal using the appropriate form (URAR-1004 - Uniform Residential Appraisal Report) documents your equity amount - and most lenders request one before they agree to cancel.
Primary Residential Mortgage, Inc. can help find out if you can eliminate your PMI. Give us a call at (214) 736-9466.