Since 1999, lenders have been required to cancel a borrower's Private Mortgage Insurance (PMI) at the point his loan balance (for a loan made past July of that year) reaches less than seventy-eight percent of the purchase price, but not at the time the borrower's equity gets to higher than twenty-two percent. (A number of "higher risk" mortgage loans are not included.) The good news is that you can cancel your PMI yourself (for a mortgage loan closing past July '99), without considering the original purchase price, when your equity gets to twenty percent.
Familiarize yourself with your mortgage statements to keep track of principal payments. Also be aware of what other homes are being sold for in your neighborhood. You are paying mostly interest if your closing was fewer than 5 years ago, so your principal probably hasn't lowered much.
At the point your equity has risen to the required twenty percent, you are not far away from stopping your PMI payments, for the life of your loan. You will need to notify your mortgage lender that you wish to cancel PMI. Your lender will require proof that your equity is high enough. The best proof there is can be found in a state certified appraisal on form URAR-1004 (Uniform Residential Appraisal Report), required by most lenders before canceling PMI.
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