Although lenders have been legally required (for loans closed after July 1999) to cancel Private Mortgage Insurance (PMI) at the time the balance gets under 78% of the price of purchase, they do not have to cancel automatically if the borrower's equity is above 22%. (Some "higher risk" loan programs are excluded.) The good news is that you can cancel your PMI yourself (for a mortgage closing past July '99), regardless of the original purchase price, after the equity rises to twenty percent.
Familiarize yourself with your loan statements to keep track of principal payments. Also stay aware of what other homes are selling for in your neighborhood. If your loan is fewer than five years old, it's likely you haven't paid down much principal - you have paid mostly interest.
You can start the process of canceling PMI as soon as you're sure your equity reaches 20%. You will need to contact your mortgage lender to let them know that you wish to cancel PMI payments. Lenders request proof of eligibility at this point. You can get proof of your equity by getting a state certified appraisal using form URAR-1004 (Uniform Residential Appraisal Report), which is required by most lending institutions before canceling PMI.