While lending institutions have been required (for loans closed past July 1999) to cancel Private Mortgage Insurance (PMI) at the time the mortgage balance gets under 78% of the price of purchase, they do not have to cancel automatically if the borrower's equity is over 22%. (There are exceptions -like some loans considered 'high risk'.) However, if your equity reaches 20% (regardless of the original price of purchase), you are able to cancel PMI (for a mortgage loan that past July 1999).
Review your statements often. Find out the purchase prices of other homes in your neighborhood. You've been paying mostly interest if you closed your mortgage loan fewer than 5 years ago, so your principal most likely hasn't been reduced by much.
Once you think you've achieved at least 20 percent equity in your home, you can begin the process of getting PMI out of your budget. You will first tell your lender that you are requesting to cancel your PMI. Next, you will be required to verify that you are eligible to cancel. A state certified appraisal using the appropriate form (URAR-1004 - Uniform Residential Appraisal Report) is all the proof you need � and your lender will probably require one before they agree to cancel PMI.
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