Since 1999, lending institutions have been legally required to cancel a borrower's Private Mortgage Insurance (PMI) at the point his loan balance (for a loan closed after July of '99) goes beneath seventy-eight percent of the purchase price, but not when the borrower's equity gets to higher than twenty-two percent. (There are exceptions -like a number of "high risk' loans.) However, you are able to cancel PMI yourself (for mortgages made past July 1999) when your equity gets to 20 percent, without consideration of the original price of purchase.
Study your statements often. Also be aware of how much other homes are being sold for in your neighborhood. You've been paying mostly interest if you closed your loan fewer than 5 years ago, so your principal most likely hasn't lowered much.
As soon as your equity has reached the required twenty percent, you are just a few steps away from canceling your PMI payments, once and for all. Contact the lending institution to ask for cancellation of your Private Mortgage Insurance. Next, you will be required to submit proof that you are eligible to cancel. Most lenders require a state certified appraisal documented on the form: URAR-1004 (Uniform Residential Appraisal Report) to determine your equity and eligibility for canceling PMI.
Do you have a question? We can help. Simply fill out the form below and we'll contact you with the answer, with no obligation to you. We guarantee your privacy.