Make Private Mortgage Insurance a Thing of the Past
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Although lenders have been legally obligated (for loans closed after July 1999) to cancel Private Mortgage Insurance (PMI) at the point the mortgage balance gets below 78% of the purchase price, they do not have to cancel PMI automatically if the loan's equity is above 22%. (The legal requirement does not apply to some higher risk mortgages.) But if your equity rises to 20% (regardless of the original price of purchase), you have the right to cancel PMI (for a loan that after July 1999).
Verify the numbers
Study your monthly statements often. Make yourself aware of the prices of other homes in your neighborhood. If your mortgage is under five years old, probably you haven't paid down much principal - it's been mostly interest.
Proof of Equity
Once your equity has reached the required twenty percent, you are not far away from stopping your PMI payments, for the life of your loan. First you will let your lender know that you are asking to cancel your PMI. Next, you will be asked to submit proof that you are eligible to cancel. A state certified appraisal using the appropriate form (URAR-1004 - Uniform Residential Appraisal Report) documents your equity amount - and almost all lending institutions request one before they agree to cancel.
SouthWind Mortgage, Inc. NMLS #276161 can help find out if you can eliminate your PMI. Call us: 561-791-8160.
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When you think you've reached 20 percent equity in your home, you can begin the process of freeing yourself from PMI payments! You will need to notify your mortgage lender that you want to cancel PMI payments and you'll need to submit proof that you have at least 20 percent equity. A state certified appraisal on the appropriate form (URAR- 1004 uniform residential appraisal report for single family homes) is the best proof there is — and most lenders require one before they'll cancel PMI.