Since 1999, lending institutions have been obligated to cancel a borrower's Private Mortgage Insurance (PMI) when his mortgage balance (for loans made past July of that year) goes beneath seventy-eight percent of the purchase price, but not at the point the borrower's equity gets to higher than twenty-two percent. (There are some exceptions -like some loans considered 'high risk'.) The good news is that you can request cancelation of your PMI yourself (for your mortgage loan that closed past July '99), no matter the original purchase price, when the equity rises to twenty percent.
Familiarize yourself with your loan statements to keep track of principal payments. You'll want to keep track of the prices of the houses that sell in your neighborhood. You are paying mostly interest if you closed your loan fewer than 5 years ago, so your principal probably hasn't gone down much.
At the point your equity has risen to the magic number of twenty percent, you are close to canceling your PMI payments, once and for all. You will need to notify your mortgage lender that you wish to cancel PMI. The lending institution will ask for proof that your equity is high enough. The best proof there is can be found in a state certified appraisal using form URAR-1004 (Uniform Residential Appraisal Report), which is required by most lending institutions before canceling PMI.
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