Although lenders have been required (for loans closed past July '99) to cancel Private Mortgage Insurance (PMI) at the point the loan balance gets under 78% of the purchase price, they do not have to cancel PMI automatically if the loan's equity is more than 22%. (Some "higher risk" loan programs are not included.) But you are able to cancel PMI yourself (for loans made past July 1999) when your equity gets to 20 percent, no matter the original price of purchase.
Familiarize yourself with your loan statements to keep your eye on principal payments. Also stay aware of how much other homes are selling for in your neighborhood. If your loan is fewer than five years old, probably you haven't made much progress with the principal � it's been mostly interest.
As soon as your equity has risen to the required twenty percent, you are close to getting rid of your PMI payments, once and for all. Contact your lending institution to request cancellation of your PMI. Lenders ask for proof of eligibility at this point. Usually lenders require a state certified appraisal documented on the form: URAR-1004 (Uniform Residential Appraisal Report) to verify your home's equity and eligibility for canceling PMI.
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