Make Private Mortgage Insurance a Thing of the Past
Although lending institutions have been required (for loans closed past July 1999) to cancel Private Mortgage Insurance (PMI) when the mortgage balance gets under 78% of the price of purchase, they do not have to cancel automatically if the equity is over 22%. (There are some loans that are not covered by this law -like some "high risk' loans.) The good news is that you can request cancelation of your PMI yourself (for your loan closing after July '99), regardless of the original price of purchase, after your equity gets to twenty percent.
Keep a running total of payments
Analyze your statements often. Also be aware of the price that other homes are purchased for in your neighborhood. If your mortgage is under five years old, chances are you haven't paid down much principal � you have been paying mostly interest.
Proof of Equity
You can start the process of PMI cancelation when you you think that your equity has risen to 20%. You will first tell your lender that you are requesting to cancel PMI. The lending institution will request proof that your equity is high enough. 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 lending institutions before canceling PMI.
At Coastal Mortgage Corp., we answer questions about PMI every day. Call us: 504-866-5626.
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