Canceling Private Mortgage Insurance

Since 1999, lenders have been required to cancel a borrower's Private Mortgage Insurance (PMI) at the point his mortgage balance (for a loan closed past July of that year) goes under seventy-eight percent of the purchase price, but not when the loan's equity reaches twenty-two percent or more. (There are some exceptions -like some loans considered 'high risk'.) But you have the right to cancel PMI yourself (for mortgages closed past July 1999) once your equity rises to 20 percent, without consideration of the original price of purchase.

Verify the numbers

Keep track of each principal payment. You'll want to keep track of the the purchase amounts of the houses that sell around you. You've been paying mostly interest if you closed your mortgage loan fewer than 5 years ago, so your principal probably hasn't lowered much.

Verify Eligibility

At the point you think you've reached 20 percent equity in your home, you can start the process of freeing yourself from PMI payments. You will first notify your lender that you are requesting to cancel your PMI. Next, you will be asked to submit proof that you have at least 20 percent equity. 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.

Norcal Capital Group, Inc can answer questions about PMI and many others. Give us a call at 6507631924.

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Norcal Capital Group, Inc

1369 El Camino Real
Millbrae, CA 94030