Make Private Mortgage Insurance a Thing of the Past
Beginning in 1999, lending institutions have been legally obligated to cancel a borrower's Private Mortgage Insurance (PMI) at the point his loan balance (for loans closed past July of '99) reaches less than seventy-eight percent of the purchase price, but not when the loan's equity climbs to more than twenty-two percent. (Some "higher risk" loan programs are excluded.) However, if your equity gets to 20% (regardless of the original price of purchase), you can cancel PMI (for a mortgage that after July 1999).
Keep a running total of payments
Analyze your statements often. Pay attention to the selling prices of other houses in your neighborhood. Unfortunately, if you have a recent mortgage - five years or under, you probably haven't been able to pay very much of the principal: you have been paying mostly interest.
Verify Equity Amount
You can start the process of PMI cancelation 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. Then you will be asked to verify that you have at least 20 percent equity. You can get proof of your home's equity by getting a state certified appraisal on form URAR-1004 (Uniform Residential Appraisal Report), which is required by most lenders before canceling PMI.
Saab Mortgage can help find out if you can eliminate your PMI. Call us: 703-288-0777.
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