Make Private Mortgage Insurance a Thing of the Past
Beginning in 1999, lending institutions have been legally obligated to cancel a borrower's Private Mortgage Insurance (PMI) at the point his mortgage balance (for loans closed after July of that year) reaches less than seventy-eight percent of the price of purchase, but not at the time the borrower's equity gets to twenty-two percent or higher. (There are some loans that are excluded -like a number of "high risk' loans.) But if your equity gets to 20% (regardless of the original purchase price), you can cancel PMI (for a mortgage loan that past July 1999).
Keep a running total of payments
Familiarize yourself with your monthly statements to keep a running total of principal payments. You'll want to keep track of the the purchase prices of the houses that are selling in your neighborhood. If your loan is under five years old, it's likely you haven't made much progress with the principal � you have paid mostly interest.
Proof of Equity
Once you think you've achieved at least 20 percent equity in your home, you can start the process of getting PMI out of your budget. You will first tell your lender that you are requesting to cancel your PMI. Your lender will request proof that your equity is high enough. 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 agree to cancel.
Coastal Mortgage Corp. can answer questions about PMI and many others. Give us a call at 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.