While lenders have been legally obligated (for loans closed past July 1999) to cancel Private Mortgage Insurance (PMI) at the point the balance goes under 78% of the purchase price, they do not have to cancel automatically if the loan's equity is above 22%. (The legal requirment does not apply to certain higher risk mortgages.) The good news is that you can cancel your PMI yourself (for a loan that closed past July '99), regardless of the original price of purchase, at the point the equity rises to twenty percent.
Do your homework
Analyze your statements often. Also keep track of what other homes are selling for in your neighborhood. If your loan is fewer than five years old, it's likely you haven't paid down much principal � it's been mostly interest.
Proof of Equity
Once your equity has risen to the desired twenty percent, you are close to getting rid of your PMI payments, once and for all. You will need to contact your mortgage lender to alert them that you wish to cancel PMI. Your lender will request proof that your equity is high enough. The best proof there is can be found in a state certified appraisal on form URAR-1004 (Uniform Residential Appraisal Report), which is required by most lending institutions before canceling PMI.
Trustin Mortgage, LLC can help find out if you can eliminate your PMI. Call us: (302) 765-8089.
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