Since 1999, lending institutions have been legally required to cancel a borrower's Private Mortgage Insurance (PMI) when his mortgage balance (for loans made past July of that year) reaches less than seventy-eight percent of the purchase price, but not at the point the loan's equity gets to twenty-two percent or higher. (There are some loans that are excluded -like some "high risk' loans.) The good news is that you can cancel your PMI yourself (for your loan that closed past July '99), no matter the original price of purchase, when the equity rises to twenty percent.
Review your statements often. You'll want to be aware of the prices of the houses that are selling around you. You've been paying mostly interest if your closing was fewer than 5 years ago, so your principal most likely hasn't been reduced by much.
You can begin the process of PMI cancelation when you determine your equity reaches 20%. Contact the lender to request cancellation of your PMI. The lending institution will ask for proof that your equity is high enough. A state certified appraisal using the appropriate form (URAR-1004 - Uniform Residential Appraisal Report) documents your equity amount � and your lender will probably request one before they agree to cancel PMI.
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