Make Private Mortgage Insurance a Thing of the Past
Although lenders have been obligated (for loans closed past July '99) to cancel Private Mortgage Insurance (PMI) at the time the loan balance gets below 78% of the purchase price, they do not have to cancel automatically if the borrower's equity is above 22%. (The law does not include a number of higher risk mortgages.) But if your equity reaches 20% (regardless of the original price of purchase), you have the right to cancel your PMI (for a loan closed past July 1999).
Do your homework
Familiarize yourself with your loan statements to keep track of principal payments. Also be aware of what other homes are selling for in your neighborhood. If your loan is fewer than 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 your equity has reached the required twenty percent, you are just a few steps away from getting rid of your PMI payments, once and for all. You will first notify your lender that you are requesting to cancel PMI. The lending institution will require proof that your equity is high enough. You can get documentation of your home's equity by getting a state certified appraisal using form URAR-1004 (Uniform Residential Appraisal Report), required by most lenders before canceling PMI.
Inlet Mortgage Corporation can help find out if you can eliminate your PMI. Call us: (561) 792-4323.