While lending institutions have been legally obligated (for loans closed after July '99) to cancel Private Mortgage Insurance (PMI) at the time the balance gets under 78% of the price of purchase, they do not have to cancel PMI automatically if the equity is over 22%. (There are exceptions -like some loans considered 'high risk'.) The good news is that you can cancel your PMI yourself (for your mortgage closing past July '99), no matter the original price of purchase, when the equity climbs to twenty percent.
Analyze your mortgage statements often. Also be aware of the price that other homes are selling for in your neighborhood. Unfortunately, if you have a recent loan - five years or fewer, you likely haven't started to pay very much of the principal: you are paying mostly interest.
At the point your equity has risen to the required twenty percent, you are close to stopping your PMI payments, once and for all. You will need to notify your mortgage lender that you want to cancel PMI. Lending institutions require documentation verifying your eligibility at this point. 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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