While lending institutions have been obligated (for loans closed after July 1999) to cancel Private Mortgage Insurance (PMI) at the point the balance gets under 78% of the purchase price, they do not have to cancel automatically if the borrower's equity is more than 22%. (There are exceptions -like some loans considered 'high risk'.) But if your equity reaches 20% (regardless of the original price of purchase), you can cancel PMI (for a mortgage closed after July 1999).
Analyze your statements often. Make yourself aware of the prices of other houses in your immediate area. If your mortgage is under five years old, chances are you haven't paid down much principal � it's been mostly interest.
Once your equity has risen to the required twenty percent, you are not far away from stopping your PMI payments, once and for all. Contact your lending institution to request cancellation of PMI. Lenders request proof of eligibility at this point. Most lenders ask for a state certified appraisal documented on the form: URAR-1004 (Uniform Residential Appraisal Report) to determine your equity and eligibility for canceling PMI.
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