For loans made after July 1999, lending institutions are required (by federal law) to automatically cancel Private Mortgage Insurance (PMI) when the balance of the loan falls below 78 percent of the purchase amount � but not when the loan reaches 22 percent equity. (There are some loans that are not covered by this law -like some loans considered 'high risk'.) But you are able to cancel PMI yourself (for loans made past July 1999) at the point your equity rises to 20 percent, regardless of the original price of purchase.
Keep a running total of your principal payments. Also keep track of what other homes are selling for in your neighborhood. Unfortunately, if yours is a recent loan - five years or fewer, you likely haven't started to pay much of the principal: you have been paying mostly interest.
You can begin the process of PMI cancelation when you're sure your equity has reached 20%. Call your lender to ask for cancellation of PMI. Lenders request paperwork verifying your eligibility at this point. A state certified appraisal documented on the appropriate form (URAR-1004 - Uniform Residential Appraisal Report) is all the proof you need � and almost all lenders require one before they agree to cancel.
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