Make Private Mortgage Insurance a Thing of the Past
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Since 1999, lenders have been legally required to cancel a borrower's Private Mortgage Insurance (PMI) when his mortgage balance (for loans closed past July of '99) goes under seventy-eight percent of the price of purchase, but not when the loan's equity gets to higher than twenty-two percent. (There are some exceptions -like some loans considered 'high risk'.) However, if your equity gets to 20% (regardless of the original price of purchase), you are able to cancel the PMI (for a mortgage that after July 1999).
Keep a running total of payments
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 houses that sell 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 gone down much.
The Proof is in the Appraisal
Once you think you've achieved at least 20 percent equity in your home, you can begin the process of canceling your Private Mortgage Insurance. You will need to notify your mortgage lender that you wish to cancel PMI payments. Your lender will ask for proof that your equity is high enough. Most lenders ask for a state certified appraisal documented on the form: URAR-1004 (Uniform Residential Appraisal Report) to verify your home's equity and eligibility for PMI cancellation.
Citywide Home Loans can help find out if you can eliminate your PMI. Call us: 4808226290.
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