Are you looking to purchase your dream home but don’t have a 20% down payment? Private Mortgage Insurance (PMI) could be the solution for you! With PMI, you can secure a mortgage with a lower down payment, making homeownership more accessible. For more homebuying tips, send us a message! Below are some tips on how to remove PMI.

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To remove Private Mortgage Insurance (PMI) on your home, you typically need to meet certain requirements set by your lender and loan program. Here are some steps you can take to remove PMI:

1. Review your loan documents: Review your loan documents and the terms of your PMI to understand the requirements for removing it. The Homeowners Protection Act (HPA) requires lenders to automatically terminate PMI when your loan balance reaches 78% of the original purchase price or appraised value of your home, whichever is less. However, you may be able to request early cancellation if you meet certain requirements.
2. Build equity in your home: The 78% threshold automatically drops based off purchase price value and reduction of the principal balance. You can request it be removed when LTV hits 80% based on original value.
3. Request a PMI cancellation: You can request PMI be removed after 2 years using new appraised value (This is only after 2 years before two years new value would not get approved to remove MI in most situations) Can request it be removed based on new value if documented improvements made to property (This is more likely to get approved then the property building equity by property value in the first 2 years)
4. Refinance your mortgage: Another option is to refinance your mortgage with a new loan that does not require PMI. However, refinancing comes with its own costs, such as closing fees, so be sure to weigh the pros and cons before deciding.

It’s important to note that not all loan programs or lenders are the same, so the specific requirements for removing PMI may vary. Contact your lender or a financial professional for more information on how to remove PMI on your specific loan.

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