Make Private Mortgage Insurance a Thing of the Past
While lending institutions have been required (for loans closed past July 1999) to cancel Private Mortgage Insurance (PMI) at the point the mortgage balance gets below 78% of the purchase price, they do not have to take similar action if the borrower's equity is above 22%. (The law does not apply to a number of higher risk mortgages.) The good news is that you can cancel your PMI yourself (for a loan that closed after July '99), regardless of the original price of purchase, after your equity reaches twenty percent.
Verify the numbers
Analyze your statements often. Also be aware of what other homes are being sold for in your neighborhood. If your loan is fewer than five years old, chances are you haven't greatly reduced principal � it's been mostly interest.
Proof of Equity
Once you find you've reached 20 percent equity, you can begin the process of canceling your Private Mortgage Insurance. You will need to call the lending institution to alert them that you want to cancel PMI payments. Then you will be required to verify that you are eligible to cancel. A state certified appraisal using the appropriate form (URAR-1004 - Uniform Residential Appraisal Report) will be all the proof you need � and most lending institutions require one before they agree to cancel PMI.
Coastal Mortgage Corp. can help find out if you can eliminate your PMI. Call us at 504-866-5626.
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