Eliminating Private Mortgage Insurance

For home loans made after July 1999, lenders are required by federal law to automatically cancel Private Mortgage Insurance (PMI) when the loan balance falls below 78 percent of your purchase price — not when you achieve 22 percent equity, which will happen much more quickly with rising property values. (Certain "higher risk" loans are excluded.) But you have the right to cancel PMI (for loans made after July 1999) once your equity reaches 20 percent, regardless of the original purchase price.

Keep track of your principal payments.  Also keep track of what other homes are selling for in your neighborhood.  If your home loan is under five years old, chances are you haven't paid down much principal — it's been mostly interest.  But real estate values in many parts of the country have gone through the roof lately.  And that can earn you 20 percent equity even if you haven't paid down much principal.