Since 1999, lending institutions have been required to cancel a borrower's Private Mortgage Insurance (PMI) when his mortgage balance (for loans closed past July of that year) goes below seventy-eight percent of the purchase price, but not at the time the borrower's equity reaches twenty-two percent or more. (Some "higher risk" mortgages are not included.) However, if your equity rises to 20% (no matter what the original purchase price was), you have the right to cancel PMI (for a mortgage closed past July 1999).
Keep a running total of money going toward the principal. Also keep track of how much other homes are purchased for in your neighborhood. Unfortunately, if you have a recent loan - five years or fewer, you likely haven't started to pay very much of the principal: you are paying mostly interest.
As soon as your equity has reached the required twenty percent, you are just a few steps away from stopping your PMI payments, once and for all. You will need to call the lender to let them know that you want to cancel PMI payments. The lending institution will ask for documentation that your equity is high enough. A state certified appraisal using the appropriate form (URAR-1004 - Uniform Residential Appraisal Report) is the best proof there is - and your lender will probably require one before they agree to cancel.
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