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While lenders have been legally required (for loans closed after July '99) to cancel Private Mortgage Insurance (PMI) when the loan balance goes below 78% of the price of purchase, they do not have to cancel PMI automatically if the loan's equity is more than 22%. (Some "higher risk" loans are excluded.) However, if your equity gets to 20% (regardless of the original purchase price), you have the legal right to cancel PMI (for a loan closed after July 1999).
Keep a record of payments
Keep track of money going toward the principal. Make yourself aware of the prices of other houses in your neighborhood. You've been paying mostly interest if your closing was fewer than 5 years ago, so your principal most likely hasn't gone down much.
Verify Equity Amount
You can start the process of canceling PMI when you you think that your equity reaches 20%. Call the lender to request cancellation of your PMI. Your lender will request documentation that your equity is at 20 percent or above. Usually 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.
AAA Mortgage Solutions, LLC can answer questions about PMI and many others. Call us: 678-494-8250.