For loans closed after July 1999, lenders are required (by federal law) to automatically cancel Private Mortgage Insurance (PMI) when the balance of the loan gets below 78 percent of the purchase amount � but not at the point the borrower achieves 22 percent equity. (There are some exceptions -like some loans considered 'high risk'.) However, if your equity gets to 20% (no matter what the original purchase price was), you have the right to cancel PMI (for a mortgage that past July 1999).
Keep a running total of each principal payment. Also stay aware of the price that other homes are being sold for in your neighborhood. You are paying mostly interest if your closing was fewer than 5 years ago, so your principal probably hasn't been reduced by much.
You can start the process of canceling your PMI at the time you're sure your equity reaches 20%. Call your lending institution to ask for cancellation of your Private Mortgage Insurance. Your lender will require documentation that your equity is high enough. The best proof there is can be found in a state certified appraisal on form URAR-1004 (Uniform Residential Appraisal Report), which is required by most lenders before canceling PMI.
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