How to Remove PMI from Your Mortgage & Save Money
How to Remove PMI from Your Mortgage & Save Money
If you purchased your home with a conventional loan and put down less than 20%, you're likely paying Private Mortgage Insurance (PMI) as part of your monthly mortgage payment. PMI is an added cost that protects the lender—not you—in case of loan default. However, the good news is you don’t have to keep paying PMI forever!
When Can You Remove PMI?
Lenders are required to cancel PMI once your loan balance reaches 78% of the original home value (meaning you have 22% equity in your home). However, you don’t have to wait that long—you can request PMI removal sooner when your loan balance reaches 80% of the original home value (or when you have 20% equity).
How to Remove PMI
If you think you've hit the 80/20 threshold, here’s what to do:
Review Your Loan Statement – Check your current loan balance and compare it to the original home value.
Contact Your Lender – Call your mortgage servicer and ask about their PMI removal process. They may require a formal request in writing.
Confirm Your Home’s Value – If your home has appreciated in value, you may have reached 20% equity sooner than expected! Many lenders allow PMI removal based on current market value, but they will require an appraisal to confirm.
Request an Appraisal (if needed) – If your lender requires proof of increased value, they will order an appraisal (which typically costs a few hundred dollars but can save you thousands over time by removing PMI).
Want to See If Your Home Has Gained Enough Equity?
Home values have been on the rise in many areas, and your property might be worth more than when you bought it! If you’d like to see if your home has increased in value enough to remove PMI, let me know! I’d be happy to provide you with an updated home value estimate so you can determine if it’s time to remove PMI and start saving on your mortgage payment.
Feel free to reach out—I’m happy to help!