While lending institutions have been obligated (for loans closed after July '99) 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 more than 22%. (There are exceptions -like some loans considered 'high risk'.) But if your equity gets to 20% (no matter what the original price was), you are able to cancel PMI (for a mortgage loan that past July 1999).
Analyze your statements often. Also stay aware of what other homes are being sold for in your neighborhood. You are paying mostly interest if the 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 has reached 20%. You will need to notify your mortgage lender that you want to cancel PMI. Then you will be asked to submit proof that you have at least 20 percent equity. A state certified appraisal documented on the appropriate form (URAR-1004 - Uniform Residential Appraisal Report) documents your equity amount � and your lender will probably require one before they'll cancel PMI.
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