Make Private Mortgage Insurance a Thing of the Past
Beginning in 1999, lending institutions have been obligated to cancel a borrower's Private Mortgage Insurance (PMI) at the point his mortgage balance (for loans closed past July of that year) reaches less than seventy-eight percent of the price of purchase, but not when the borrower's equity gets to twenty-two percent or higher. (A number of "higher risk" loans are excluded.) However, if your equity reaches 20% (regardless of the original price of purchase), you have the right to cancel PMI (for a mortgage closed past July 1999).
Keep a record of payments
Analyze your monthly statements often. Also keep track of how much other homes are purchased for in your neighborhood. If your mortgage is under five years old, chances are you haven't greatly reduced principal � you have paid mostly interest.
Proof of Equity
You can start the process of PMI cancelation when you calculate that your equity reaches 20%. First you will notify your lender that you are requesting to cancel PMI. Then you will be required to submit proof that you have at least 20 percent equity. Most lenders require a state certified appraisal documented on the form: URAR-1004 (Uniform Residential Appraisal Report) to verify your equity and eligibility for PMI cancellation.
Family Mortgage Company of Hawaii, Inc. NMLS #244497 can help find out if you can eliminate your PMI. Call us: (808) 935-0678.
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