Make Private Mortgage Insurance a Thing of the Past
While lending institutions have been legally obligated (for loans closed after July 1999) to cancel Private Mortgage Insurance (PMI) at the time the mortgage balance gets under 78% of the price of purchase, they do not have to take similar action if the borrower's equity is over 22%. (Some "higher risk" morgages are not included.) But you can actually cancel PMI yourself (for mortgages made past July 1999) when your equity reaches 20 percent, regardless of the original price of purchase.
Do your homework
Analyze your statements often. You'll want to be aware of the the purchase prices of the houses that are selling in your neighborhood. If your mortgage is fewer than five years old, chances are you haven't greatly reduced principal � it's been mostly interest.
As soon as your equity has reached the desired twenty percent, you are just a few steps away from canceling your PMI payments, for the life of your loan. Contact your lending institution to ask for cancellation of your Private Mortgage Insurance. Next, you will be asked to submit proof that you have at least 20 percent equity. The best proof there is can be found in a state certified appraisal using form URAR-1004 (Uniform Residential Appraisal Report), required by most lending institutions before canceling PMI.
Crown Mortgage can help find out if you can eliminate your PMI. Call us at (434) 975-5626.
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