Make Private Mortgage Insurance a Thing of the Past
Since 1999, lenders 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 at the time the borrower's equity climbs to higher than twenty-two percent. (The legal obligation does not apply to a number of higher risk mortgages.) But if your equity reaches 20% (no matter what the original purchase price was), you have the right to cancel PMI (for a loan that past July 1999).
Verify the numbers
Keep track of money going toward the principal. Pay attention to the purchase prices of other homes in your immediate area. You've been paying mostly interest if your loan closed fewer than 5 years ago, so your principal probably hasn't been reduced by much.
Proof of Equity
Once your equity has risen to the required twenty percent, you are close to canceling your PMI payments, for the life of your loan. First you will notify your lender that you are requesting to cancel your PMI. The lending institution will ask for proof that your equity is at 20 percent or above. Most lenders require a state certified appraisal documented on the form: URAR-1004 (Uniform Residential Appraisal Report) to determine your home's equity and eligibility for PMI cancellation.
Saab Mortgage can answer questions about PMI and many others. Call us: 703-288-0777.
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