Eliminating Private Mortgage Insurance
While lending institutions have been legally required (for loans closed past July '99) to cancel Private Mortgage Insurance (PMI) at the time the loan balance dips below 78% of the purchase price, they do not have to take similar action if the equity is above 22%. (There are exceptions -like a number of "high risk' loans.) However, if your equity rises to 20% (no matter what the original purchase price was), you have the right to cancel your PMI (for a mortgage closed after July 1999).
Verify the numbers
Study your statements often. Also be aware of how much other homes are purchased for in your neighborhood. You've been paying mostly interest if you closed your loan fewer than 5 years ago, so your principal probably hasn't been reduced by much.
Proof of Equity
You can begin the process of canceling PMI as soon as you determine your equity reaches 20%. First you will notify your lender that you are requesting to cancel your PMI. The lending institution will ask for documentation that your equity is high enough. You can acquire documentation of your equity by getting a state certified appraisal using form URAR-1004 (Uniform Residential Appraisal Report), which is required by most lending institutions before canceling PMI.
Debbie Oliver NMLS License #248252, America's First Choice Mortgage, NMLS License #279234 can answer questions about PMI and many others. Give us a call at 214-663-5355.