Make Private Mortgage Insurance a Thing of the Past
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While lending institutions have been obligated (for loans closed past July '99) to cancel Private Mortgage Insurance (PMI) at the time the loan balance goes under 78% of the purchase price, they do not have to cancel PMI automatically if the loan's equity is more than 22%. (There are exceptions -like some loans considered 'high risk'.) The good news is that you can request cancellation of your PMI yourself (for a mortgage loan that closed past July '99), without considering the original purchase price, at the point the equity gets to twenty percent.
Do your homework
Familiarize yourself with your loan statements to keep track of principal payments. Make yourself aware of the prices of other homes in your neighborhood. You've been paying mostly interest if your closing was fewer than 5 years ago, so your principal probably hasn't been reduced by much.
Verify Equity Amount
You can begin the process of canceling your PMI when you you think that your equity has reached 20%. You will need to contact the mortgage lender to alert them that you want to cancel PMI. Next, you will be required to submit documentation that you have at least 20 percent equity. Usually lenders require a state certified appraisal documented on the form: URAR-1004 (Uniform Residential Appraisal Report) to determine your home's equity and eligibility for canceling PMI.
Cooperative Teachers Credit Union can help find out if you can eliminate your PMI. Give us a call: 903-561-2603.