Canceling Private Mortgage Insurance
Beginning in 1999, lenders have been required to cancel a borrower's Private Mortgage Insurance (PMI) at the point his mortgage balance (for loans made past July of '99) goes under seventy-eight percent of the price of purchase, but not at the point the borrower's equity climbs to more than twenty-two percent. (This law does not cover a number of higher risk mortgages.) The good news is that you can cancel your PMI yourself (for your loan closing past July '99), regardless of the original price of purchase, at the point your equity climbs to twenty percent.
Verify the numbers
Familiarize yourself with your mortgage statements to keep a running total of principal payments. Also keep track of how much other homes are purchased for in your neighborhood. If your loan is under five years old, it's likely you haven't greatly reduced principal � it's been mostly interest.
The Proof is in the Appraisal
You can start the process of canceling PMI when you're sure your equity has risen to 20%. You will first tell your lender that you are asking to cancel your PMI. Your lender will require 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 determine your home's equity and eligibility for PMI cancellation.
Chase Mortgage can help find out if you can eliminate your PMI. Call us: 435-755-6622.