Make Private Mortgage Insurance a Thing of the Past
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Since 1999, lending institutions have been required to cancel a borrower's Private Mortgage Insurance (PMI) at the point his mortgage balance (for loans made past July of that year) goes beneath seventy-eight percent of the price of purchase, but not when the borrower's equity gets to twenty-two percent or more. (The law does not apply to certain higher risk mortgages.) The good news is that you can request cancellation of your PMI yourself (for a loan closing after July '99), no matter the original price of purchase, when the equity gets to twenty percent.
Verify the numbers
Familiarize yourself with your loan statements to keep your eye on principal payments. Pay attention to the purchase prices of other houses in your immediate area. You've been paying mostly interest if you closed your mortgage fewer than 5 years ago, so your principal probably hasn't gone down much.
Proof of Equity
Once your equity has reached the required twenty percent, you are close to canceling your PMI payments, for the life of your loan. Contact the lending institution to request cancellation of your Private Mortgage Insurance. Lending institutions ask for proof of eligibility at this point. The best proof there is can be found in a state certified appraisal on form URAR-1004 (Uniform Residential Appraisal Report), which is required by most lenders before canceling PMI.
Keypoint Mortgage can answer questions about PMI and many others. Call us at 201-998-9050.
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