Make Private Mortgage Insurance a Thing of the Past
Although lenders have been required (for loans closed past July 1999) to cancel Private Mortgage Insurance (PMI) when the loan balance gets below 78% of the price of purchase, they do not have to cancel PMI automatically if the equity is over 22%. (Certain "higher risk" morgages are not included.) However, if your equity gets to 20% (regardless of the original purchase price), you have the legal right to cancel PMI (for a loan closed after July 1999).
Verify the numbers
Familiarize yourself with your loan statements to keep your eye on principal payments. You'll want to stay aware of the prices of the homes that sell around you. You are paying mostly interest if your loan closed fewer than 5 years ago, so your principal probably hasn't lowered much.
Verify Equity Amount
At the point your equity has risen to the magic number of twenty percent, you are not far away from canceling your PMI payments, once and for all. You will need to call the lending institution to alert them that you wish to cancel PMI payments. Lenders ask for proof of eligibility at this point. Most lenders ask for 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 at (808) 935-0678.