For loans made since July 1999, lenders are obligated (by federal law) to automatically cancel Private Mortgage Insurance (PMI) when the loan balance goes lower than 78 percent of your purchase price � but not at the point the borrower achieves 22 percent equity. (There are exceptions -like some "high risk' loans.) However, if your equity rises to 20% (regardless of the original purchase price), you are able to cancel the PMI (for a mortgage closed past July 1999).
Keep a running total of each principal payment. You'll want to keep track of the the purchase prices of the houses that sell in your neighborhood. You've been paying mostly interest if your loan closed fewer than 5 years ago, so your principal probably hasn't been reduced by much.
As soon as your equity has reached the required twenty percent, you are not far away from canceling your PMI payments, for the life of your loan. Call the mortgage lender to request cancellation of your PMI. The lending institution will request documentation that your equity is high enough. You can get proof of your home's equity by getting a state certified appraisal on form URAR-1004 (Uniform Residential Appraisal Report), required by most lending institutions before canceling PMI.
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