If you bought your home with less than 20% down, chances are you’re paying Private Mortgage Insurance (PMI). While PMI helps lenders manage risk, it adds an extra monthly cost for homeowners—typically $100–$300 per month depending on your loan size. But the good news? You might be able to cancel it.
Here’s how to find out if you’re eligible—and what steps to take:
✅ 1. Know Your Loan Type
Start by identifying what kind of loan you have:
Conventional loan: PMI can be removed under certain conditions.
FHA loan: This has Mortgage Insurance Premiums (MIP) instead of PMI, and cancellation rules are different. Most FHA loans after 2013 require refinancing to eliminate MIP.
🏡 2. Check Your Loan-to-Value Ratio (LTV)
PMI is typically required until your LTV (loan balance compared to your home’s value) drops below 80%. You can get there in two ways:
Paying down your loan over time
Property appreciation increasing your home’s value
Once you hit 78% LTV based on the original value, lenders are required to remove PMI automatically (per federal law). But you can request early cancellation once you hit 80%—you just have to ask.
📈 3. Has Your Home Appreciated?
If your home’s value has gone up significantly, you might qualify to cancel PMI sooner. Some lenders allow PMI cancellation based on a new appraised value if:
You’ve owned the home for at least 2 years and your LTV is 75% or less, or
You’ve owned it more than 5 years and your LTV is 80% or less
👉 Tip: Ask your lender what their appraisal process is and if you need to order an appraisal through them.
📝 4. Review Your Mortgage Statement
Look for:
Current loan balance
PMI charge
Original purchase price
This will help you calculate if you’re close to the 80% LTV threshold.
📞 5. Call Your Loan Servicer
Don’t just guess—reach out directly to your loan servicer (the company you send payments to). Ask:
What is your current LTV?
Are you eligible for PMI cancellation?
Do they require a formal appraisal?
Are there any fees?
Each lender has slightly different guidelines, so this step is key.
🛑 Important Notes:
You must be current on your mortgage payments
No recent late payments (usually none in the past 12 months)
Your loan must be “seasoned” (typically at least 2 years old)
Some investors (like Fannie Mae or Freddie Mac) may have specific rules
Final Thoughts
Canceling PMI can save you thousands over the life of your loan. If you think you’re close to the 80% mark—or your home has appreciated in value—it’s worth making the call. And if you’re not quite there yet, stay on top of your equity progress so you can act when the time comes.
Want help figuring out your current home value or whether you qualify? Let’s chat—I can run a quick market analysis to help you get a clearer picture.
