While lending institutions have been obligated (for loans closed after July 1999) to cancel Private Mortgage Insurance (PMI) at the point the balance goes under 78% of the price of purchase, they do not have to take similar action if the borrower's equity is above 22%. (This legal obligation does not include a number of higher risk mortgages.) However, you have the right to cancel PMI yourself (for mortgages made after July 1999) once your equity gets to 20 percent, no matter the original price of purchase.
Keep track of each principal payment. You'll want to stay aware of the the purchase amounts of the houses that are selling in your neighborhood. Unfortunately, if you have a new loan - five years or under, you probably haven't begun to pay much of the principal: you have been paying mostly interest.
You can start the process of canceling your PMI as soon as you determine your equity has reached 20%. You will need to contact the lending institution to let them know that you want to cancel PMI. Your lender will request documentation that your equity is at 20 percent or above. Most lenders require a state certified appraisal documented on the form: URAR-1004 (Uniform Residential Appraisal Report) to determine your equity and eligibility for PMI cancellation.
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