Make Private Mortgage Insurance a Thing of the Past
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 below 78% of the price of purchase, they do not have to cancel automatically if the loan's equity is over 22%. (The law does not cover a number of higher risk mortgages.) However, you are able to cancel PMI yourself (for mortgage loans closed past July 1999) once your equity rises to 20 percent, without consideration of the original price of purchase.
Verify the numbers
Analyze your statements often. Find out the purchase prices of other homes in your immediate area. You've been paying mostly interest if your loan closed fewer than 5 years ago, so your principal probably hasn't lowered much.
The Proof is in the Appraisal
You can begin the process of PMI cancelation as soon as you you think that your equity has risen to 20%. First you will let your lender know that you are asking to cancel PMI. Next, you will be asked to verify that you are eligible to cancel. 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.
Family Mortgage Company of Hawaii, Inc. NMLS #244497 can answer questions about PMI and many others. Call us at (808) 935-0678.
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