Make Private Mortgage Insurance a Thing of the Past
While lending institutions have been legally obligated (for loans closed past July '99) to cancel Private Mortgage Insurance (PMI) at the point the loan balance dips under 78% of the purchase price, they do not have to cancel PMI automatically if the loan's equity is more than 22%. (A number of "higher risk" morgages are excluded.) The good news is that you can cancel your PMI yourself (for a mortgage that closed past July '99), regardless of the original purchase price, after the equity rises to twenty percent.
Do your homework
Keep a running total of each principal payment. Pay attention to the selling prices of other houses in your neighborhood. Unfortunately, if yours is a recent loan - five years or under, you probably haven't had a chance to pay very much of the principal: you have been paying mostly interest.
You can begin the process of PMI cancelation as soon as you're sure your equity has risen to 20%. You will first let your lending institution know that you are asking to cancel PMI. The lending institution will request documentation that your equity is high enough. The best proof there is can be found in a state certified appraisal on form URAR-1004 (Uniform Residential Appraisal Report), required by most lending institutions before canceling PMI.
Financial Edge Mortgage Corp. can help find out if you can eliminate your PMI. Give us a call at 425-508-9988.
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