For loans made
after July 1999, lenders are required by federal law to
automatically cancel Private Mortgage Insurance (PMI) when the loan
balance falls below 78 percent of your purchase price not when you
achieve 22 percent equity, which will happen much more quickly with
rising property values.(Certain "higher risk"
loans are excluded.)But you have the right to
cancel PMI (for loans made after July 1999) once your equity reaches
20 percent, regardless of the original purchase price.
Keep track of your principal payments.Also keep
track of what other homes are selling for in your neighborhood.If your loan is under five years old, chances are you haven't
paid down much principal it's been mostly interest.But property values in many parts of the country have gone
through the roof lately.And that can earn you
20 percent equity even if you haven't paid down much principal.
When you think
you've reached 20 percent equity in your home, you can begin the
process of freeing yourself from PMI payments!
You will need to notify your mortgage lender that you want to cancel
PMI payments and you'll need to submit proof that you have at least
20 percent equity.A state certified appraisal
on the appropriate form (URAR- 1004 uniform residential appraisal
report for single family homes) is the best proof there is and most
lenders require one before they'll cancel PMI.
Axxium
Mortgage INC.
1105 Taylorsville Rd
Washington Crossing, Pa 18977
Phone: 215-493-1200Fax: 215-493-7200
E-mail:emccusker@axxiummortgage.com
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