Although lending institutions have been legally obligated (for loans closed after July '99) to cancel Private Mortgage Insurance (PMI) at the time the balance goes below 78% of the price of purchase, they do not have to cancel PMI automatically if the borrower's equity is more than 22%. (There are some loans that are not covered by this law -like some "high risk' loans.) But you are able to cancel PMI yourself (for mortgages closed after July 1999) at the point your equity rises to 20 percent, without consideration of the original purchase price.
Keep track of your principal payments. You'll want to keep track of the the purchase prices of the homes that are selling around you. Unfortunately, if you have a recent loan - five years or under, you likely haven't been able to pay much of the principal: you have been paying mostly interest.
At the point your equity has risen to the required twenty percent, you are not far away from canceling your PMI payments, once and for all. Call your mortgage lender to request cancellation of your Private Mortgage Insurance. Next, you will be required to verify that you are eligible to cancel. The best proof there is can be found in a state certified appraisal using form URAR-1004 (Uniform Residential Appraisal Report), which is required by most lending institutions before canceling PMI.
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