Although lending institutions have been legally required (for loans closed past July 1999) to cancel Private Mortgage Insurance (PMI) at the point the loan balance gets below 78% of the price of purchase, they do not have to cancel automatically if the borrower's equity is above 22%. (Some "higher risk" mortgage loans are not included.) But if your equity rises to 20% (regardless of the original price of purchase), you have the legal right to cancel your PMI (for a loan that past July 1999).
Keep track of money going toward the principal. You'll want to keep track of the the purchase amounts of the homes that sell around you. You've been paying mostly interest if your closing was fewer than 5 years ago, so your principal probably hasn't been reduced by much.
You can begin the process of PMI cancelation as soon as you're sure your equity reaches 20%. Call your mortgage lender to ask for cancellation of your PMI. Lenders require proof of eligibility at this point. A state certified appraisal documented on the appropriate form (URAR-1004 - Uniform Residential Appraisal Report) documents your equity amount � and your lender will probably request one before they agree to cancel PMI.
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