Although lenders have been legally obligated (for loans closed past July 1999) to cancel Private Mortgage Insurance (PMI) at the point the loan balance gets below 78% of the price of purchase, they do not have to cancel PMI automatically if the equity is above 22%. (Some "higher risk" loan programs are not included.) But if your equity gets to 20% (regardless of the original purchase price), you are able to cancel the PMI (for a loan closed past July 1999).
Keep track of each principal payment. Also keep track of the price that other homes are selling for in your neighborhood. If your mortgage is under five years old, chances are you haven't made much progress with the principal - it's been mostly interest.
You can start the process of PMI cancellation at the time you're sure your equity has risen to 20%. Call your lending institution to request cancellation of PMI. Your lender will ask for proof that your equity is at 20 percent or above. The best proof there is can be found in 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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