Eliminating Private Mortgage Insurance
While lenders have been legally required (for loans closed after July 1999) to cancel Private Mortgage Insurance (PMI) at the time the mortgage balance goes under 78% of the price of purchase, they do not have to take similar action if the borrower's equity is over 22%. (Certain "higher risk" morgages are excluded.) But if your equity rises to 20% (regardless of the original price of purchase), you can cancel PMI (for a mortgage closed past July 1999).
Verify the numbers
Study your mortgage statements often. You'll want to keep track of the prices of the homes that sell around you. You've been paying mostly interest if your mortgage closed fewer than 5 years ago, so your principal most likely hasn't lowered much.
You can begin the process of PMI cancelation when you calculate that your equity has risen to 20%. You will need to contact your lender to let them know that you want to cancel PMI payments. Next, you will be required to verify that you have at least 20 percent equity. A state certified appraisal documented on the appropriate form (URAR-1004 - Uniform Residential Appraisal Report) will be all the proof you need � and most lenders will require one before they agree to cancel.
Hancock Mortgage Partners, LLC NMLS# 229844 can answer questions about PMI and many others. Give us a call: 225 819 7670.