Beginning in 1999, lenders have been required to cancel a borrower's Private Mortgage Insurance (PMI) when his mortgage balance (for loans made past July of '99) reaches less than seventy-eight percent of the purchase price, but not when the borrower's equity gets to twenty-two percent or higher. (The law does not cover certain higher risk mortgages.) The good news is that you can cancel your PMI yourself (for a mortgage closing after July '99), regardless of the original price of purchase, once your equity reaches twenty percent.
Do your homework
Familiarize yourself with your monthly statements to keep track of principal payments. Find out the selling prices of other houses in your immediate area. If your mortgage is fewer than five years old, it's likely you haven't greatly reduced principal � it's been mostly interest.
Verify Equity Amount
You can begin the process of canceling your PMI as soon as you're sure your equity has risen to 20%. You will first let your lender know that you are asking to cancel your PMI. Lenders ask for proof of eligibility at this point. You can acquire documentation of your home's equity by getting a state certified appraisal on form URAR-1004 (Uniform Residential Appraisal Report), which is required by most lenders before canceling PMI.
Crown Mortgage can answer questions about PMI and many others. Give us a call: (434) 975-5626.
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.