Canceling Private Mortgage Insurance
For loans closed after July 1999, lending institutions are required (by federal law) to automatically cancel Private Mortgage Insurance (PMI) when the loan balance falls under 78 percent of the purchase price � but not when the borrower achieves 22 percent equity. (Certain "higher risk" mortgage loans are excluded.) The good news is that you can request cancelation of your PMI yourself (for your mortgage loan that closed after July '99), no matter the original purchase price, after the equity climbs to twenty percent.
Verify the numbers
Keep a running total of money going toward the principal. You'll want to stay aware of the the purchase prices of the houses that are selling in your neighborhood. Unfortunately, if you have a new mortgage - five years or fewer, you probably haven't been able to pay very much of the principal: you are paying mostly interest.
When you determine you have achieved at least 20 percent equity in your home, you can begin the process of canceling your Private Mortgage Insurance. Call your lending institution to ask for cancellation of your PMI. The lending institution will require documentation that your equity is at 20 percent or above. A state certified appraisal using the appropriate form (URAR-1004 - Uniform Residential Appraisal Report) is the best proof there is � and most lenders require one before they'll cancel PMI.
Coastal Mortgage Corp. can help find out if you can eliminate your PMI. Give us a call: 504-866-5626.
Got a Question?
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.