Make Private Mortgage Insurance a Thing of the Past
Although lending institutions have been legally obligated (for loans closed after July '99) to cancel Private Mortgage Insurance (PMI) when the balance dips below 78% of the purchase price, they do not have to take similar action if the borrower's equity is over 22%. (The legal requirment does not cover a number of higher risk mortgages.) However, you can actually cancel PMI yourself (for mortgage loans made past July 1999) at the point your equity gets to 20 percent, no matter the original purchase price.
Keep a running total of payments
Study your statements often. You'll want to keep track of the the purchase amounts of the homes that sell in your neighborhood. Unfortunately, if you have a new mortgage - five years or fewer, you probably haven't started to pay much of the principal: you have been paying mostly interest.
The Proof is in the Appraisal
You can begin the process of canceling your PMI at the time you calculate that your equity reaches 20%. You will need to notify your mortgage lender that you wish to cancel PMI. Then you will be required to verify that you have at least 20 percent equity. The best proof there is can be found in a state certified appraisal on form URAR-1004 (Uniform Residential Appraisal Report), required by most lenders before canceling PMI.
CHASE MORTGAGE INC #317430 can help find out if you can eliminate your PMI. Call us at 435-755-6622.