Make Private Mortgage Insurance a Thing of the Past
Beginning in 1999, lending institutions have been legally required to cancel a borrower's Private Mortgage Insurance (PMI) when his loan balance (for a loan made after July of '99) reaches less than seventy-eight percent of the price of purchase, but not at the point the borrower's equity gets to twenty-two percent or more. (There are some loans that are not included -like some "high risk' loans.) The good news is that you can request cancelation of your PMI yourself (for your mortgage closing after July '99), regardless of the original price of purchase, after your equity climbs to twenty percent.
Do your homework
Analyze your statements often. You'll want to stay aware of the prices of the homes that are selling around you. If your loan is under five years old, chances are you haven't greatly reduced principal � you have paid mostly interest.
Proof of Equity
You can begin the process of PMI cancelation when you calculate that your equity has risen to 20%. You will need to contact your mortgage lender to alert them that you wish to cancel PMI. The lending institution will require documentation that your equity is high enough. Most lenders require a state certified appraisal documented on the form: URAR-1004 (Uniform Residential Appraisal Report) to verify your home's equity and eligibility for PMI cancellation.
At Coastal Mortgage Corp., we answer questions about PMI every day. Give us a call: 504-866-5626.
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