While lenders have been obligated (for loans closed past July 1999) to cancel Private Mortgage Insurance (PMI) at the time the loan balance gets under 78% of the price of purchase, they do not have to cancel automatically if the equity is above 22%. (Some "higher risk" mortgage loans are not included.) But you have the right to cancel PMI yourself (for loans made after July 1999) when your equity gets to 20 percent, without consideration of the original purchase price.
Analyze your mortgage statements often. Make yourself aware of the selling prices of other houses in your neighborhood. You've been paying mostly interest if the closing was fewer than 5 years ago, so your principal most likely hasn't lowered much.
As soon as your equity has risen to the magic number of twenty percent, you are close to stopping your PMI payments, for the life of your loan. You will first let your lender know that you are requesting to cancel your PMI. Your lender will ask for documentation that your equity is high enough. You can get documentation of your equity by getting a state certified appraisal on form URAR-1004 (Uniform Residential Appraisal Report), which is required by most lenders before canceling PMI.
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