Although lending institutions have been legally required (for loans closed past July 1999) to cancel Private Mortgage Insurance (PMI) at the time the mortgage balance dips below 78% of the price of purchase, they do not have to cancel PMI automatically if the borrower's equity is above 22%. (There are some exceptions -like some "high risk' loans.) The good news is that you can cancel your PMI yourself (for a mortgage loan closing past July '99), regardless of the original price of purchase, once your equity gets to twenty percent.
Do your homework
Analyze your loan statements often. You'll want to stay aware of the the purchase prices of the houses that are selling around you. You've been paying mostly interest if the closing was fewer than 5 years ago, so your principal probably hasn't gone down much.
Verify Equity Amount
You can begin the process of PMI cancelation when you're sure your equity reaches 20%. Call the lending institution to request cancellation of your Private Mortgage Insurance. Your lender will require proof that your equity is high enough. A state certified appraisal documented on the appropriate form (URAR-1004 - Uniform Residential Appraisal Report) is the best proof there is � and most lenders require one before they agree to cancel PMI.
Alternative Mortgage Group can answer questions about PMI and many others. Give us a call at 561-395-4264.