Canceling Private Mortgage Insurance
Since 1999, lending institutions have been obligated to cancel a borrower's Private Mortgage Insurance (PMI) at the point his mortgage balance (for loans closed past July of '99) goes under seventy-eight percent of the price of purchase, but not at the point the borrower's equity climbs to twenty-two percent or more. (Certain "higher risk" morgages are excluded.) However, you are able to cancel PMI yourself (for mortgages closed after July 1999) at the point your equity rises to 20 percent, without consideration of the original purchase price.
Do your homework
Familiarize yourself with your mortgage statements to keep a running total of principal payments. You'll want to be aware of the the purchase amounts of the homes that are selling around you. You are paying mostly interest if your closing was fewer than 5 years ago, so your principal probably hasn't been reduced by much.
As soon as your equity has reached the required twenty percent, you are not far away from getting rid of your PMI payments, once and for all. Call your lending institution to ask for cancellation of your Private Mortgage Insurance. Next, you will be asked to submit proof that you have at least 20 percent equity. A state certified appraisal documented on the appropriate form (URAR-1004 - Uniform Residential Appraisal Report) documents your equity amount � and your lender will probably require one before they agree to cancel PMI.
Saab Mortgage can answer questions about PMI and many others. Call us: 703-288-0777.
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