Make Private Mortgage Insurance a Thing of the Past
Beginning in 1999, lenders have been legally obligated to cancel a borrower's Private Mortgage Insurance (PMI) when his loan balance (for a loan closed after July of '99) reaches less than seventy-eight percent of the price of purchase, but not when the borrower's equity gets to higher than twenty-two percent. (There are some loans that are not included -like a number of "high risk' loans.) However, if your equity reaches 20% (no matter what the original purchase price was), you are able to cancel the PMI (for a loan that past July 1999).
Do your homework
Familiarize yourself with your loan statements to keep track of principal payments. Pay attention to the selling prices of other houses in your neighborhood. If your loan is fewer than five years old, probably you haven't paid down much principal � it's been mostly interest.
Proof of Equity
You can start the process of canceling PMI as soon as you're sure your equity has risen to 20%. Contact your lending institution to ask for cancellation of your Private Mortgage Insurance. Your lender will require proof that your equity is high enough. A state certified appraisal using the appropriate form (URAR-1004 - Uniform Residential Appraisal Report) will be all the proof you need � and most lenders require one before they agree to cancel.
At Financial Edge Mortgage Corp., we answer questions about PMI every day. Call us at 425-508-9988.
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