Eliminating Private Mortgage Insurance
Although lending institutions have been legally required (for loans closed after July '99) to cancel Private Mortgage Insurance (PMI) at the point the balance goes under 78% of the purchase price, they do not have to cancel PMI automatically if the loan's equity is over 22%. (A number of "higher risk" morgages are not included.) But if your equity rises to 20% (regardless of the original purchase price), you are able to cancel PMI (for a mortgage closed past July 1999).
Do your homework
Keep a running total of money going toward the principal. Also stay aware of the price that other homes are being sold for in your neighborhood. If your loan is fewer than five years old, it's likely you haven't paid down much principal � you have paid mostly interest.
The Proof is in the Appraisal
You can start the process of PMI cancelation at the time you're sure your equity has risen to 20%. First you will let your lending institution know that you are requesting to cancel PMI. Your lender will request proof that your equity is at 20 percent or above. Most lenders require a state certified appraisal documented on the form: URAR-1004 (Uniform Residential Appraisal Report) to verify your equity and eligibility for canceling PMI.
Chase Mortgage can help find out if you can eliminate your PMI. Give us a call: 435-755-6622.