Since 1999, lending institutions have been legally required to cancel a borrower's Private Mortgage Insurance (PMI) when his mortgage balance (for loans closed past July of '99) goes beneath seventy-eight percent of the price of purchase, but not at the time the borrower's equity climbs to twenty-two percent or more. (There are some exceptions -like a number of "high risk' loans.) The good news is that you can cancel your PMI yourself (for a loan closing after July '99), regardless of the original price of purchase, when the equity rises to twenty percent.
Analyze your statements often. You'll want to be aware of the prices of the houses that are selling around you. You've been paying mostly interest if your mortgage loan closed fewer than 5 years ago, so your principal probably hasn't been reduced by much.
At the point your equity has reached the desired twenty percent, you are close to getting rid of your PMI payments, once and for all. Call your lending institution to request cancellation of PMI. Then you will be required to verify that you are eligible to cancel. Most lenders require a state certified appraisal documented on the form: URAR-1004 (Uniform Residential Appraisal Report) to determine your equity and eligibility for PMI cancellation.
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.