Although lenders have been required (for loans closed after July '99) to cancel Private Mortgage Insurance (PMI) when 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%. (There are some exceptions -like a number of "high risk' loans.) The good news is that you can request cancelation of your PMI yourself (for your mortgage closing after July '99), no matter the original purchase price, at the point your equity rises to twenty percent.
Verify the numbers
Familiarize yourself with your loan statements to keep track of principal payments. Pay attention to the selling prices of other houses in your immediate area. Unfortunately, if yours is a recent mortgage loan - five years or fewer, you probably haven't started to pay much of the principal: you are paying mostly interest.
Verify Equity Amount
Once you find you've reached 20 percent equity, you can begin the process of canceling your Private Mortgage Insurance. Call your lender to ask for cancellation of your PMI. Next, you will be required to verify that you have at least 20 percent equity. You can get documentation of your equity by getting a state certified appraisal using form URAR-1004 (Uniform Residential Appraisal Report), which is required by most lenders before canceling PMI.
Chase Mortgage can help find out if you can eliminate your PMI. Give us a call at 435-755-6622.