Although lending institutions have been required (for loans closed past July '99) to cancel Private Mortgage Insurance (PMI) at the time the mortgage balance gets under 78% of the purchase price, they do not have to take similar action if the equity is over 22%. (The law does not apply to a number of higher risk mortgages.) The good news is that you can cancel your PMI yourself (for a mortgage loan that closed after July '99), without considering the original price of purchase, once the equity rises to twenty percent.
Study your loan statements often. Make yourself aware of the purchase prices of other houses in your immediate area. You are paying mostly interest if the closing was fewer than 5 years ago, so your principal most likely hasn't been reduced by much.
As soon as your equity has risen to the magic number of twenty percent, you are close to getting rid of your PMI payments, once and for all. Call your lending institution to request cancellation of PMI. Then you will be asked to verify that you are eligible to cancel. A state certified appraisal documented on the appropriate form (URAR-1004 - Uniform Residential Appraisal Report) is all the proof you need � and your lender will probably request one before they'll cancel PMI.
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