While lenders have been legally required (for loans closed after July '99) to cancel Private Mortgage Insurance (PMI) when the balance gets under 78% of the price of purchase, they do not have to cancel automatically if the borrower's equity is more than 22%. (Some "higher risk" morgages are not included.) But if your equity reaches 20% (regardless of the original price of purchase), you can cancel the PMI (for a mortgage closed past July 1999).
Keep track of each principal payment. Pay attention to the prices of other homes in your neighborhood. Unfortunately, if yours is a recent mortgage loan - five years or under, you likely haven't begun to pay a lot of the principal: you have been paying mostly interest.
When you think you've achieved at least 20 percent equity, you can begin the process of freeing yourself from PMI payments. Call the lending institution to ask for cancellation of PMI. The lending institution will ask for proof that your equity is high enough. A state certified appraisal documented on the appropriate form (URAR-1004 - Uniform Residential Appraisal Report) verifies your equity amount � and your lender will probably request one before they'll cancel PMI.
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