While lending institutions have been legally obligated (for loans closed past July '99) to cancel Private Mortgage Insurance (PMI) at the point the loan balance goes under 78% of the purchase price, they do not have to take similar action if the equity is above 22%. (This legal obligation does not include some higher risk mortgages.) But if your equity gets to 20% (regardless of the original price of purchase), you have the right to cancel PMI (for a loan that after July 1999).
Verify the numbers
Study your mortgage statements often. Also be aware of how much other homes are selling for in your neighborhood. You are paying mostly interest if your mortgage loan closed fewer than 5 years ago, so your principal probably hasn't lowered much.
At the point your equity has reached the required twenty percent, you are close to stopping your PMI payments, for the life of your loan. You will need to call your mortgage lender to let them know that you wish to cancel PMI payments. The lending institution will request proof that your equity is at 20 percent or above. A state certified appraisal documented on the appropriate form (URAR-1004 - Uniform Residential Appraisal Report) is the best proof there is � and your lender will probably request one before they agree to cancel.
U.S.A. Lending, Inc. can help find out if you can eliminate your PMI. Call us at 305-967-7200.