Make Private Mortgage Insurance a Thing of the Past
Beginning in 1999, lending institutions have been required to cancel a borrower's Private Mortgage Insurance (PMI) when his loan balance (for a loan closed after July of that year) goes below seventy-eight percent of the price of purchase, but not at the time the borrower's equity reaches higher than twenty-two percent. (There are some exceptions -like certain "high risk' loans.) However, you can actually cancel PMI yourself (for loans closed past July 1999) when your equity reaches 20 percent, regardless of the original purchase price.
Verify the numbers
Review your monthly statements often. Also stay aware of what other homes are purchased for in your neighborhood. If your mortgage is fewer than five years old, chances are you haven't made much progress with the principal � it's been mostly interest.
Verify Equity Amount
Once your equity has reached the magic number of twenty percent, you are close to stopping your PMI payments, once and for all. You will need to notify your mortgage lender that you want to cancel PMI. Lenders require paperwork verifying your eligibility at this point. Most lenders ask for a state certified appraisal documented on the form: URAR-1004 (Uniform Residential Appraisal Report) to verify your equity and eligibility for PMI cancellation.