Make Private Mortgage Insurance a Thing of the Past
For loans closed after July 1999, lenders are obligated (by federal law) to automatically cancel Private Mortgage Insurance (PMI) when the balance of the loan gets under 78 percent of the purchase price - but not when the loan reaches 22 percent equity. (There are some exceptions -like some loans considered 'high risk'.) But you can actually cancel PMI yourself (for mortgages closed past July 1999) at the point your equity gets to 20 percent, regardless of the original purchase price.
Keep track of payments
Analyze your statements often. Also stay aware of how much other homes are being sold for in your neighborhood. If your mortgage is under five years old, probably you haven't greatly reduced principal - you have paid mostly interest.
The Proof is in the Appraisal
As soon as your equity has risen to the required twenty percent, you are not far away from stopping your PMI payments, once and for all. First you will notify your lender that you are requesting to cancel your PMI. Next, you will be asked to submit documentation that you are eligible to cancel. The best proof there is can be found in a state certified appraisal using form URAR-1004 (Uniform Residential Appraisal Report), which is required by most lenders before canceling PMI.