For loans closed after July 1999, lenders are required (by federal law) to automatically cancel Private Mortgage Insurance (PMI) when the loan balance falls lower than 78 percent of your purchase amount � but not when the loan reaches 22 percent equity. (Some "higher risk" mortgage loans are not included.) But if your equity gets to 20% (no matter what the original price was), you have the right to cancel PMI (for a loan closed after July 1999).
Keep a running total of payments
Familiarize yourself with your monthly statements to keep a running total of principal payments. Make yourself aware of the prices of other houses in your immediate area. Unfortunately, if yours is a new mortgage - five years or fewer, you likely haven't been able to pay very much of the principal: you are paying mostly interest.
You can start the process of canceling PMI as soon as you determine your equity has risen to 20%. You will need to notify your mortgage lender that you want to cancel PMI payments. Next, you will be asked to verify that you are eligible to cancel. Usually lenders require a state certified appraisal documented on the form: URAR-1004 (Uniform Residential Appraisal Report) to verify your home's equity and eligibility for canceling PMI.
Saab Mortgage can help find out if you can eliminate your PMI. Give us a call: 703-288-0777.
Got a Question?
Do you have a question? We can help. Simply fill out the form below and we'll contact you with the answer, with no obligation to you. We guarantee your privacy.