While lenders have been obligated (for loans closed after July '99) to cancel Private Mortgage Insurance (PMI) at the point the balance gets below 78% of the price of purchase, they do not have to take similar action if the equity is above 22%. (There are exceptions -like some "high risk' loans.) However, you have the right to cancel PMI yourself (for loans closed after July 1999) once your equity rises to 20 percent, no matter the original price of purchase.
Analyze your statements often. Also keep track of what other homes are being sold for in your neighborhood. Unfortunately, if yours is a recent mortgage loan - five years or under, you likely haven't been able to pay much of the principal: you are paying mostly interest.
At the point your equity has risen to the magic number of twenty percent, you are close to canceling your PMI payments, for the life of your loan. Call the lender to request cancellation of your PMI. Lenders request proof of eligibility at this point. A state certified appraisal documented on the appropriate form (URAR-1004 - Uniform Residential Appraisal Report) is all the proof you need � and your lender will probably request one before they agree to cancel PMI.
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