Although lending institutions have been obligated (for loans closed after July 1999) to cancel Private Mortgage Insurance (PMI) at the time the balance goes below 78% of the purchase price, they do not have to cancel automatically if the borrower's equity is more than 22%. (A number of "higher risk" morgages are excluded.) The good news is that you can cancel your PMI yourself (for your mortgage closing past July '99), regardless of the original price of purchase, after the equity rises to twenty percent.
Review your statements often. Also keep track of the price that other homes are being sold for in your neighborhood. Unfortunately, if yours is a recent mortgage loan - five years or under, you likely haven't started to pay much of the principal: you are paying mostly interest.
Once you find you have achieved at least 20 percent equity in your home, you can start the process of canceling your Private Mortgage Insurance. First you will let your lending institution know that you are requesting to cancel your PMI. Lenders request paperwork verifying your eligibility at this point. You can acquire documentation of your equity by getting 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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