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) at the point his mortgage balance (for a loan closed after July of that year) reaches less than seventy-eight percent of the price of purchase, but not at the time the loan's equity gets to higher than twenty-two percent. (A number of "higher risk" morgages are excluded.) The good news is that you can request cancelation of your PMI yourself (for a mortgage that closed past July '99), without considering the original price of purchase, after your equity gets to twenty percent.
Do your homework
Familiarize yourself with your monthly statements to keep a running total of principal payments. You'll want to keep track of the the purchase amounts of the houses that sell in your neighborhood. You are paying mostly interest if you closed your mortgage loan fewer than 5 years ago, so your principal probably hasn't lowered much.
Proof of Equity
As soon as your equity has reached the required twenty percent, you are close to stopping your PMI payments, once and for all. First you will notify your lender that you are asking to cancel your PMI. Lenders ask for documentation verifying your eligibility at this point. You can acquire documentation of your equity by getting a state certified appraisal using form URAR-1004 (Uniform Residential Appraisal Report), required by most lending institutions before canceling PMI.
One Source Lending 303-220-7500 can help find out if you can eliminate your PMI. Give us a call at 303-220-7500.