While lending institutions have been legally required (for loans closed past July 1999) to cancel Private Mortgage Insurance (PMI) at the point the loan balance dips under 78% of the purchase price, they do not have to take similar action if the loan's equity is above 22%. (There are some exceptions -like a number of "high risk' loans.) However, if your equity reaches 20% (no matter what the original price was), you can cancel PMI (for a mortgage loan closed past July 1999).
Keep a record of payments
Keep a running total of money going toward the principal. You'll want to stay aware of the the purchase amounts of the houses that sell around you. Unfortunately, if you have a recent loan - five years or under, you probably haven't started to pay much of the principal: you are paying mostly interest.
Once your equity has risen to the required twenty percent, you are not far away from canceling your PMI payments, for the life of your loan. You will first let your lending institution know that you are requesting to cancel PMI. Then you will be asked to submit proof that you have at least 20 percent equity. A state certified appraisal using the appropriate form (URAR-1004 - Uniform Residential Appraisal Report) documents your equity amount � and most lenders require one before they'll cancel PMI.
F&T Mortgage, Inc. NMLS # 168839 (www.nmlsconsumeraccess.org) can help find out if you can eliminate your PMI. Give us a call: 214-300-8756.