Make Private Mortgage Insurance a Thing of the Past
Since 1999, lenders have been required to cancel a borrower's Private Mortgage Insurance (PMI) at the point his mortgage balance (for a loan made past July of '99) goes below seventy-eight percent of the purchase price, but not at the time the loan's equity gets to twenty-two percent or more. (The legal obligation does not cover certain higher risk mortgages.) However, if your equity gets to 20% (regardless of the original purchase price), you can cancel the PMI (for a mortgage loan that past July 1999).
Do your homework
Familiarize yourself with your loan statements to keep a running total of principal payments. You'll want to be aware of the prices of the houses that sell around you. If your mortgage is fewer than five years old, it's likely you haven't greatly reduced principal � it's been mostly interest.
The Proof is in the Appraisal
At the point you think you've achieved at least 20 percent equity in your home, you can begin the process of getting PMI out of your budget. You will need to contact the lending institution to let them know that you wish to cancel PMI. Lenders request proof of eligibility at this point. You can get documentation of your home's equity by getting a state certified appraisal using form URAR-1004 (Uniform Residential Appraisal Report), which is required by most lenders before canceling PMI.
One Source Lending 303-220-7500 can answer questions about PMI and many others. Call us at 303-220-7500.