While lenders have been obligated (for loans closed past July 1999) to cancel Private Mortgage Insurance (PMI) at the time the loan balance goes under 78% of the price of purchase, they do not have to cancel PMI automatically if the equity is more than 22%. (There are some exceptions -like some loans considered 'high risk'.) The good news is that you can request cancelation of your PMI yourself (for a mortgage loan closing past July '99), without considering the original purchase price, at the point your equity gets to twenty percent.
Familiarize yourself with your loan statements to keep a running total of principal payments. You'll want to be aware of the the purchase prices of the homes that sell around you. If your mortgage is under five years old, probably you haven't greatly reduced principal � it's been mostly interest.
At the point your equity has risen to the required twenty percent, you are close to getting rid of your PMI payments, once and for all. Call your lender to request cancellation of your Private Mortgage Insurance. Lending institutions require documentation verifying your eligibility at this point. Usually lenders ask for a state certified appraisal documented on the form: URAR-1004 (Uniform Residential Appraisal Report) to determine your equity and eligibility for canceling PMI.
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