Although lenders have been legally required (for loans closed after July 1999) to cancel Private Mortgage Insurance (PMI) at the time the mortgage balance goes under 78% of the price of purchase, they do not have to cancel PMI automatically if the equity is over 22%. (Some "higher risk" mortgage loans are not included.) But if your equity rises to 20% (no matter what the original price was), you have the right to cancel your PMI (for a loan that past July 1999).
Keep a running total of money going toward the principal. Also stay aware of what other homes are purchased for in your neighborhood. Unfortunately, if you have a new mortgage loan - five years or fewer, you probably haven't been able to pay very much of the principal: you have been paying mostly interest.
At the point you find you have achieved at least 20 percent equity, you can begin the process of freeing yourself from PMI payments. You will first let your lender know that you are requesting to cancel PMI. Then you will be asked to verify that you have at least 20 percent equity. 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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