Make Private Mortgage Insurance a Thing of the Past
While lenders have been obligated (for loans closed after July 1999) to cancel Private Mortgage Insurance (PMI) when the balance dips below 78% of the price of purchase, they do not have to take similar action if the borrower's equity is more than 22%. (Some "higher risk" morgages are not included.) But you can actually cancel PMI yourself (for mortgages closed after July 1999) at the point your equity gets to 20 percent, without consideration of the original purchase price.
Verify the numbers
Review your statements often. Also be aware of the price that other homes are purchased for in your neighborhood. Unfortunately, if yours is a recent loan - five years or fewer, you likely haven't started to pay very much of the principal: you have been paying mostly interest.
Verify Equity Amount
As soon as your equity has risen to the desired twenty percent, you are close to getting rid of your PMI payments, for the life of your loan. You will first let your lender know that you are requesting to cancel PMI. Then you will be asked to verify that you are eligible to cancel. You can get documentation of your home's equity by getting a state certified appraisal using form URAR-1004 (Uniform Residential Appraisal Report), which is required by most lending institutions before canceling PMI.
Coastal Mortgage Corp. can help find out if you can eliminate your PMI. Call us: 504-866-5626.
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