How to Remove PMI From Your Mortgage

Start by identifying the insurance

This guide concerns borrower paid private mortgage insurance on covered conventional loans. FHA, VA and other arrangements follow different rules. Ask the servicer to identify the loan and insurance type rather than assuming every monthly insurance charge can be removed the same way.

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Request PMI cancellation at 80 percent of original value

For covered loans, a request at 80 percent of original value generally needs to be in writing and can require a good payment history, current payments, no junior liens and evidence that value has not declined. Additional principal can help reach that balance, but does not erase the other requirements.

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How automatic PMI termination differs

For covered loans, automatic termination generally occurs at the scheduled date the balance reaches 78 percent of original value if payments are current. That is not the same as assuming an extra payment to 78 percent automatically ends PMI immediately. Ask for both dates and the specific requirements.

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A hypothetical original value example

At an original value of $300,000, 80 percent is $240,000 and 78 percent is $234,000. For a purchase covered by these rules, original value generally means the lower of the contract price or the appraisal at purchase. For a refinance, it generally means the appraisal at refinancing. It is not today’s online estimate.

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Ask about a separate current value option

Some investor or servicer rules may permit a review based on a newer value, with their own seasoning, payment history and valuation requirements. A Homebot or other automated estimate is not itself cancellation approval. Get the requirements, valuation cost and process before paying for a valuation.

Ask about the halfway point too

For a covered loan, PMI must also end after the midpoint of the original amortization schedule if you are current, even when the balance has not reached the scheduled 78 percent level. Ask your servicer whether this separate rule applies and for the exact termination date.

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