Make Private Mortgage Insurance a Thing of the Past
While lending institutions have been obligated (for loans closed past July 1999) to cancel Private Mortgage Insurance (PMI) at the point the balance gets below 78% of the purchase price, they do not have to cancel PMI automatically if the loan's equity is over 22%. (There are some exceptions -like some "high risk' loans.) However, if your equity gets to 20% (regardless of the original purchase price), you have the legal right to cancel PMI (for a mortgage closed past July 1999).
Keep a record of payments
Analyze your loan statements often. 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 been paying mostly interest.
Proof of Equity
Once you find you have reached 20 percent equity in your home, you can begin the process of getting PMI out of your budget. Contact your mortgage lender to ask for cancellation of PMI. Lending institutions require proof of eligibility at this point. Most lenders ask for a state certified appraisal documented on the form: URAR-1004 (Uniform Residential Appraisal Report) to verify your equity and eligibility for canceling PMI.
At Stepping Stone Mortgage, we answer questions about PMI every day. Give us a call: 5416833300.