Although lending institutions have been required (for loans closed past July '99) to cancel Private Mortgage Insurance (PMI) at the time the balance goes below 78% of the price of purchase, they do not have to take similar action if the equity is more than 22%. (This law does not include some higher risk mortgages.) The good news is that you can request cancellation of your PMI yourself (for your loan closing past July '99), no matter the original purchase price, once your equity gets to twenty percent.
Keep a running total of each principal payment. Also keep track of the price that other homes are purchased for in your neighborhood. Unfortunately, if you have a recent loan - five years or fewer, you probably haven't had a chance to pay very much of the principal: you have been paying mostly interest.
When you determine you have reached 20 percent equity in your home, you can begin the process of canceling your Private Mortgage Insurance. You will need to notify your mortgage lender that you wish to cancel PMI. Lending institutions ask for documentation verifying your eligibility at this point. You can get proof of your home's equity by getting a state certified appraisal on form URAR-1004 (Uniform Residential Appraisal Report), which is required by most lenders before canceling PMI.